Brexit news for financial services firms-from 20 July 2019 to 2 August 2019

06 August 2019 Download PDF

  1. EC: EQUIVALENCE IN THE AREA OF FINANCIAL SERVICES

The EC has set out its approach on equivalence and on recent legislative improvements in terms of how it grants equivalence to non-EU countries. It also describes how the EC and ESAs monitor the situation in those countries after equivalence decisions have been taken and how recent EU legislative changes have strengthened the equivalence framework. A press release providing a summary can be accessed here.  The communication states that ‘ An equivalence decision is a unilateral and discretionary act of the EU, conducted and concluded by the Commission…' and that ‘ the determination of the equivalence of a third-country regime results from a rigorous case-by-case assessment of third-country rules and its supervision by the Commission.’  The full communication can be accessed here. 

       2. EU REPEAL EQUIVALENCE DECISION FOR ARGENTINA, AUSTRALIA, BRAZIL, CANADA AND SINGAPORE

The European Commission for the first time repealed an equivalence decision.  The EU had amended their own regulations regarding credit rating agencies in 2013, as the above countries did not amend their own regulation to reflect this change the European Commission repealed their equivalent status in this area. This decision came as the EU was providing greater information on how equivalence decisions are made. A press release can be accessed here. The separate implementing decisions can be accessed here. 

        3. BOE/PRA: CP18/19: UK WITHDRAWAL FROM THE EU: CHANGES FOLLOWING EXTENSION OF ARTICLE 50

This joint consultation contains an update on BoE/PRA's intended use of the temporary transitional power provided for in the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 and proposals to fix deficiencies arising from Brexit and to make consequential changes in light of the extension to the Article 50 period. Responses are required by 18 September 2019. Further details can be found here. 

         4. LETTER FROM THE FORMER SECRETARY OF STATE INDICATING WHICH COUNTRIES WILL TREAT THE UK AS AN EU MEMBER FOR TRADE AGREEMENTS

The International Trade Committee have released a letter from the former Secretary of State Liam Fox. The letter includes a list of countries who have stated their support in treating the UK as if it were an EU member state, in relation to trade agreements, during a transition period. Countries who have made a statement include: Australia, Canada, Egypt, New Zealand and Norway.    

         5. FCA:CP 19/26 : DRAFT TECHNICAL STANDARDS ON THE CONTENT AND FORMAT OF STS NOTIFICATIONS UNDER THE ONSHORED SECURITISATION REGULATION

This is FCA’s first CP setting out proposed technical standards for the UK Securitisation Regulation (defined as the EU Securitisation Regulation)  brought into UK law on exit day and amended by the Securitisation (Amendment) (EU Exit) Regulations 2019) in the event of a no-deal Brexit. Responses are required by 27 August 2019. A link to the full CP is available here.

Other publications from the RegZone Brexit news feed

FCA: Amended Directions in relation to e-money and payment services

FCA has published amended Directions in relation to the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018. Link to Amendment one and .amendment two.   

HoC: Financial services: contribution to the UK economy

This HoC Library briefing paper provides information on the economic output of the financial services sector and international comparisons.

HoC: The status of "retained EU Law"

This HoC Library briefing explains ‘retained EU law’ and how it can be changed.

BIS: Speech by Sharon Donnery: Weathering storms

Text of this speech given by the acting Governor of the Central Bank of Ireland follows, in which, amongst other matters, she discusses Brexit and financial services firms.

HoL EU Financial Affairs Sub-Committee: The UK's financial obligations in the event of "no deal"

The Committee has launched this inquiry and is inviting submissions on a number of questions including the status of the UK’s financial obligations to the EU, and the EU’s financial obligations to the UK, in the event of a no-deal Brexit; how the UK’s financial obligations to the EU in the event of a "no-deal Brexit compare to those agreed under the draft financial settlement; how have the Article 50 extensions affected the value of the UK’s financial obligations to the EU and how the UK’s financial obligations be legally enforced and under which court’s jurisdiction. Responses are required by 28 August 2019.

FCA: Brexit – extension to FCA's use of the temporary transitional power

FCA has confirmed that it intends to extend the proposed duration of the directions issued under the temporary transitional power to 31 December 2020 to reflect the extension of Article 50. Other than the additional time, its approach remains unchanged. Further details can be found here.

HoC European Scrutiny Committee: 72nd Report of Session 2017-19

Sections 1 and 5 of the report consider whistleblowing and breaches of EU law and EU supervision of UK-based central counterparties after Brexit respectively. The first item is still under scrutiny by the Committee. With regard to the second item, the Committee notes that there is no further scope for the Government to improve the text of the new EMIR Regulation, but adds that given the importance of the changes to EMIR for the UK’s financial services industry in the context of Brexit, it draws developments set out in the text to the attention of the Exiting the EU Committee and to the TSC. The full report can be accessed here.

FCA: Wealth management and stockbroking supervision strategy

This "Dear CEO" letter sets out FCA's view of the key risks of harm that wealth management and stockbroking firms pose to their customers or the markets in which they operate and requests firms to consider if they presents these risks and their strategies for mitigating them. The main areas of FCA's supervision strategy are: best execution; fraud, investment scams and market abuse; costs and disclosures; Brexit and SMCR.

HoC PACAC: The role of Parliament in the UK constitution: the scrutiny of international treaties and other agreements

The Committee has launched this new inquiry to examine parliamentary scrutiny of international treaties and other agreements and has requested a call for submissions. Among the questions for comment, the Committee asks for submissions on the implications of the judgement of the Supreme Court in R (Miller) v Secretary of State for Exiting the European Union. Responses are required by 16 September 2019

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Agency Database

Future Dates

* Estimated date

  • 31 December 2019

    Following PRA's policy statement (PS10/17) - operational continuity firms are expected to submit the template (PRA109) 45 business days after the first reporting period ending 31 December.

  • 31 December 2019

    End of the five-year transitional period under which UCITS will not require a (PRIIPs-style) KID in addition to a UCITS KIID (i.e. five years after the PRIIPs Regulation comes into force)

  • 2019

    ESMA is to submit a report to the European Parliament this year regarding the efficiency of the SFTR reporting obligation.