The Financial Conduct Authority has set out proposals for financial services in the event that the U.K. leaves the European Union on March 29 without establishing a period in which new rules can be implemented.
The financial watchdog Wednesday published two consultation papers covering amendments to the FCA Handbook and Binding Technical Standards, which covers EU rules for which the FCA will be responsible after Brexit; and outlining its Temporary Permissions Regime, which will enable European Economic Area firms and strategies using the passporting regime into the U.K. to continue operating for a limited period of time while seeking full U.K. authorization. Under EU regulation, the passporting regime allows firms in member states to provide financial services across the EU under a common set of rules.
The proposed changes to the standards are largely straightforward updates, the FCA said in the introduction to the standards consultation paper. The temporary permissions regime consultation sets out how the FCA envisages how these limited-period rules will work.
"The FCA is planning to be ready for a range of scenarios," Nausicaa Delfas, executive director of international at the FCA, said in a statement accompanying the papers. "Today we are publishing two consultation papers to ensure that in the event the U.K. leaves the EU in March 2019 without an implementation period, we have a robust regulatory regime from day one, and to ensure a smooth transition for EEA firms and funds currently passporting into the U.K."
Both consultations are open to comment until Dec. 7. The FCA is accepting responses via its online form, by email and in writing to Handbook Review Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN; and Gavin Davies, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN for the temporary permissions regime.
