The Financial Conduct Authority (FCA) is gearing up for Brexit. It may have been the focal point of the media’s attentions for the past two years but there is still a huge amount of uncertainty surrounding Brexit and this is reflected in the statement the FCA released today.
The British regulator noted that it is having to prepare itself for a wide range of possible outcomes. This would include the possibility that the United Kingdom (UK) leaves the European Union (EU) without a proper withdrawal agreement by the 29th March 2019.
Thus far, the UK government and the EU have agreed the terms of a transitional period. This would run from March 2019 to December 2020 and, during that period, EU law would remain applicable in the UK.
May you live in interesting times
Those searching for some regulatory certainty will be disappointed to know that this agreement is a component of the wider withdrawal agreement – the terms of which have not been agreed upon. Without stating its plans explicitly, the FCA stated that it is preparing for a scenario in which no deal is reached.
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Unfortunately for the Brexiteers, under the UK government’s EU withdrawal legislation, the EU (Withdrawal) Act, EU law will be converted and transferred into UK law at the moment the UK leaves the EU.
In today’s statement, the FCA noted that it will be responsible for amending and maintaining the EU’s “binding technical standards.” These are a set of rules that provide directives and guidance on how EU regulations should be adhered to.
The FCA will also be making amendments to its handbook. This handbook provides a complete overview of the FCA’s legislation and any changes made to that legislation. It will have to be amended in order to reflect changes made by the UK government to EU law.
The FCA will not be undertaking these changes immediately. It will be launching a consultation this autumn regarding its proposed amendments to the handbook and the binding technical standards.