The Australian Securities and Investments Commission (ASIC) today released its preparation plan for Brexit. With the deadline less than two months away, the Australian regulator is planning for the worst, but hoping for the best.
The United Kingdom is scheduled to leave the European Union on March 29 this year. This is expected to take place regardless of whether a deal has been reached between the two.
According to ASIC’s statement today, the regulator is monitoring the situation closely and has been in close contact with the Financial Conduct Authority (FCA), the Bank of England (BoE) and other Australian financial authorities to identify and plan for potential Brexit-related impacts, including a no deal situation.
Commenting on the preparation plans, ASIC Commissioner Sean Hughes said: “ASIC is well placed to manage the impacts arising in a ‘no deal’ scenario. We have been working closely with the UK’s financial regulators and our aim is to limit disruption to Australian financial services and our markets.”
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As part of its plans, ASIC wants to strengthen its relationship with UK financial regulators, such as the FCA, post-Brexit. Once the UK has left the bloc, the FCA will take on more responsibility and acquire functions and supervisory powers in relation to credit rating agencies, benchmarks and trade repositories.
ASIC to Set Up new MoU with FCA
These are currently managed at the European level by the European Securities and Markets Authority (ESMA). The BoE will also take on new functions which are currently exercised by ESMA, in relation to non-UK central counterparties.
“ASIC and the FCA will enter into new Memorandums of Understanding (MoU) on trade repositories and credit rating agencies and will update our existing MoU on alternative investment funds. ASIC and the BoE will update information sharing arrangements on clearing and settlement facilities,” the statement said.
The BoE has also confirmed that it will conduct an equivalence assessment of Australia’s regime for central counterparties. The Australian regulator, along with the Reserve Bank of Australia (RBA), the country’s central bank, is working together with the BoE on the equivalence assessment, ASIC added.