The European Securities and Markets Authority (ESMA), told financial market participants in a statement today to finalise preparations and implement suitable contingency plans in advance of the end of the UK’s transition period on 31 December 2020.
The regulator also confirmed that previously agreed Memoranda of Understandings (MoUs) on cooperation and information exchange concluded with the UK’s Financial Conduct Authority (FCA) remain valid and will come into effect at the end of the transition period.
On 1 January 2021, once the UK’s transition period ends, firms whose activity might be impacted should have fully implemented their preparatory measures to mitigate any risks stemming from the end of the transition period, according to ESMA. All entities should also have provided appropriate information to their clients on any resulting consequences, the regulator added.
ESMA noted that previously published Brexit statements, in particular, ESMA’s general opinion to support supervisory convergence in the context of the UK withdrawing from the EU issued on 31 May 2017 and sector-specific opinions issued on 13 July 2017, remain relevant and should continue to be followed.
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“ESMA will continue to review its Brexit-related statements, in particular in relation to operational issues, and will further communicate in due course,” the regulator stated.
Preparing for a no-deal Brexit
On 1 February 2019, ESMA and EU national securities regulators announced the agreement of MoUs with the UK’s FCA to cover cooperation and exchange of information in the event the UK left the EU without a withdrawal agreement. At midnight (CET) on 31 January 2020, as the Withdrawal Agreement took effect and the UK entered into a transition period. As EU law continues to apply in and to the UK, these MoUs were not required to take effect.
ESMA, EU national securities regulators, and the FCA confirm that these MoUs, agreed in 2019, remain relevant and appropriate to ensure continued good cooperation and exchange of information and will come into effect at the end of the transition period, which is set to expire on 31 December 2020, according to ESMA’s statement.