Brexit news for financial services firms from - 3 September 2019 to 13 September 2019

United Kingdom

1. EIOPA highlight risks of a no-deal Brexit

The Joint Committee of the European Supervisory Authorities published its latest report on Risks and Vulnerabilities in the EU Financial System. The report highlights uncertainties surround the UK's exit from the EU. It states ‘Although there seems to be a “Brexit fatigue” in the financial sector, supervisors continue to encourage institutions to prepare contingency plans for a no-deal Brexit… Contingency plans should be implemented by 31 October 2019 at the latest.’ 

2. EC Brexit 'no deal' preparedness communication

The Commission has again told stakeholders in the EU27 to prepared for a 'no-deal' scenario. The full statement can be viewed here. The Commission has published a detailed checklist to help businesses prepare. The Commission has proposed that the European Solidarity Fund and the European Globalisation Adjustment Fund be made available to support businesses most effected by a 'no deal' scenario. Chapter 2 deals with Financial Services.

3. FCA step up efforts to ensure firms are prepared for a no-deal Brexit

The FCA to help firms prepare will be running a series of digital adverts and has set up a dedicated telephone line. The full details are available here. It has also published an information table, providing links to the dedicated Brexit websites of financial regulators in EEA Member States. The FCA is urging all firms to finalise their no-deal preparations.

4. The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019

This SI has been made.

5. Financial Services (Implementation of Legislation) Bill 2017-2019

Due to the prorogation of Parliament this Bill has fallen. It was explained in a debate in the Commons on 5 September 2019 that this would happen to all Bills 'stuck' in Parliament at the time. This Bill was intended to allow HMT to implement EU financial services legislation adopted in the two year window after the UK left the EU. 

Other publications from the RegZone Brexit news feed

City UK publish The Future UK-US Trading Relationship

This report published on 5 September 2019 looks at the future of UK-US relations. The report highlights data exchange as key to financial services; ‘The importance of financial and related professional services (FRPS) to the UK economy is beyond doubt. As the industry becomes increasingly digitalised, its ability to continue to innovate and provide customers around the world with a range of products that suit their needs will become increasingly reliant on the terms by which firms can exchange data internationally.’ Currently data exchange between the UK and the US is governed by the EU-US Privacy Shield. This report looks at way to preserve this data exchange once the UK leaves the EU.

BoE publish updated  ‘worst case’ No Deal No Transition scenario

The Treasury Select Committee on 17 July 2019 asked the Bank of England whether the Brexit analysis it had produced in November 2018 was still fully relevant. The Bank of England responded with a letter including an updated ‘worst case’ No Deal No Transition scenario.  It states that ‘ In summary, advancements in preparations for a No Deal No Transition scenario mean that the Bank’s assessment of a worst case No Deal No Transition scenarios has become less severe.’

EU Scrutiny Committee heard from legal experts in inquiry examining post-Brexit scrutiny of EU law and policy

The Committee were questioning what the reach and impact of EU law and policy would be in different Brexit scenarios. They discuss the fallen Financial Services Bill and regulatory alignment. The full statements can be accessed here

The European Union (Withdrawal) (No.6) Bill

This House of Lords Briefing sets out the main points of the Bill. The Bill introduced by Hilary Benn, is to ensure that the UK does not leave the EU on 31 October 2019 without an agreement.

HMT: Record of Financial Stability Report

The report discusses: Brexit, the vulnerability of open ended funds, moving away from Libor, developments in payments and climate change.

The Prospectus (Amendment etc) (EU Exit) Regulations 2019

This SI has been made. 

FCA: Quarterly Consultation Paper No. 25 

The FCA are proposing further Brexit related changes to the Handbook and Binding Technical Standards following the extension of Article 50. Full details can be accessed in Chapter 7 of the Consultation Paper.