A no-deal Brexit look to be on the horizon as the deadline approaches and there seem to be no changes in the stance held by the UK’s Prime Minister, Boris Johnson. Businesses and regulators in the country are making the necessary preparations for a no-deal scenario.
The UK’s FCA has stepped up efforts to inform businesses and other market stakeholders of the regulatory changes that would come with a no-deal Brexit. The regulator will be promoting its Brexit dedicated web pages and a dedicated phone line as they try to make sure that players in the financial sector are adequately prepared for the implications of a no-deal Brexit.
15 months to comply with no deal regulations
According to the FCA, companies conducting business from the UK will have 15 months to adjust their business practices and align with the new regulations that will come after the UK leaves the EU without a deal. The UK is expected to leave the EU on the 31st of October, and leaving without a deal could have serious effects for stakeholders in the financial sector.
Nausicca Delfas, the FCA’s executive director of international, said that the regulatory body has done a lot of work in preparation for the UK leaving the EU. She went on to say that they have held workshops and published extensive information on their website in a bid to reach companies and concerned organizations around the country. These market participants need to be prepared for the changes that will come after the 31st of October.
These statements from the FCA come after the regulator announced an extension of the deadline for financial services providers and investment firms to register for a Temporary Permissions Regime (TPR). The regulator extended the deadline to the 30th of October and urged firms that fall within those groups to ensure that they have the registration before the deadline expires. The extension came after the deadline for Brexit was extended from the 29th of March to the 31st of October.
Purpose of the TPR
The FCA created the TPR to allow firms that currently use passports licenses in the UK to notify the FCA of their intentions to continue doing regulated businesses in the country. The firms can apply for full authorization from the regulator during the course of the TPR.
The TPR will protect businesses from the consequences of an abrupt passport regime fall away as a result of a no-deal Brexit. A no-deal Brexit will not give firms and stakeholders a transition period and the TPR creates this transition period for financial sector participants.