Brexit Asset Management Update

In this blog post we summarise the latest Brexit developments related to asset management.

• Letters from UK financial regulators and HMT – preparations for no-deal Brexit
• FCA statement on operation of MiFID transparency regime post-Brexit
• FOS Q&As on effect of no-deal Brexit
• IOSCO Repository of Regulatory Initiatives for Brexit Preparedness
• FCA flowchart on EEA-firms operating in UK after Brexit
• Chancellor’s Spring Statement announces plans to consult on post-Brexit financial services regulation

Letters from UK financial regulators and HMT – preparations for no-deal Brexit

The Treasury Committee has published the following correspondence:

• a letter from Andrew Bailey, Chief Executive of the FCA, on the publication of the FCA’s Brexit Policy Statement and related material;
• a letter from Sir Jon Cunliffe, Deputy Governor Financial Stability BoE, and Sam Woods, Deputy Governor and CEO PRA, on the publication of the BoE’s Policy Statement and other related material; and
• a letter from John Glen, Economic Secretary to the Treasury, on the publications by the UK financial regulators on their preparations for leaving the EU without an implementation period.

In the FCA’s letter, Mr Bailey said the FCA intends to publish the rules, BTS and directions under the temporary transitional power in final form in late March to take effect from exit day.

FCA statement on operation of MiFID transparency regime post-Brexit

The FCA has published a supervisory statement outlining how it will operate the pre- and post-trade transparency regime under the Markets in Financial Instruments Directive (MiFID) for the secondary trading of financial instruments if the UK leaves the European Union on 29 March without a withdrawal agreement. Under the UK legislation that will then take effect the FCA will be responsible for many of the tasks the European Securities and Markets Authority (ESMA) currently undertakes under the EU legislation, MiFID II (the MiFID) and Markets in Financial Instruments Regulation (MiFIR). The FCA anticipates that it will not, by 29 March, have fully developed and implemented the technology to make the relevant calculations and assessments that ESMA currently undertakes and to publish the results.

FOS Q&As on effect of no-deal Brexit

The Financial Ombudsman Service (FOS) has published a brief questions and answers (Q&As) on what the UK leaving the EU without a withdrawal agreement would mean for consumers and the FOS. The FOS expects to be able to continue to look at complaints that relate to activities before the UK left the EU in the same way as before.

IOSCO Repository of Regulatory Initiatives for Brexit Preparedness

The International Organization of Securities Commissions (IOSCO) has published the following webpages with consolidated lists of Brexit-related financial services regulatory developments to assist investors, market participants and regulators to prepare for the UK’s exit from the EU:

• Governmental and regulators’ websites providing information on Brexit preparedness; and
• Information for specific market segments.

FCA flowchart on EEA-firms operating in UK after Brexit

The FCA has published a flowchart explaining how the temporary permissions regime (TPR) and financial services contracts regime (FSCR) will enable EEA-based firms to continue to operate in the UK after Brexit. The flowchart should be read alongside the Treasury’s temporary permission and financial services contracts legislation.

Chancellor’s Spring Statement announces plans to consult on post-Brexit financial services regulation

The Chancellor has presented his Spring Statement 2019 to Parliament. In his statement the Chancellor announced that ahead of summer, the Government will set out its approach to ensuring the UK’s financial services regulatory framework adapts to the UK’s new constitutional position outside of the EU.

We comment on the announced changes to the FCA Handbook in the event of a no deal, the letters sent by the Department for Business, Energy & Industrial Strategy on the implications of no-deal Brexit on the accounting and audit sector, and the expected amendments to the Takeover Code in our blog post here. We also discuss post-Brexit MAR reporting here.