The UK Financial Conduct Authority (FCA) has published updated information for brokers on the ramifications of Brexit in a no-deal scenario.
October 30, 2019, | AtoZ Markets – Following the agreement with European Union (EU) leaders to offer the United Kingdom (UK) an extension on the date for the UK’s departure from the EU, the FCA is also extending the deadline for brokers to register for its Temporary Permissions Regime (TPR) until January 30, 2020.
FCA extends window for brokers applying to Brexit TPR
The City watchdog also states that brokers that wish to update their existing notification have until January 15, 2020.
Moreover, firms should continue to comply with existing regulatory requirements. This includes those relating to MiFID transaction reporting and EMIR trade reporting requirements. The arrangements described in the FCA’s announcement on October 11 are suspended and the FCA expects firms to continue to report as normal.
The TPR aims to mitigate potential risks of a ‘no-deal Brexit,’ where the passporting regime falls away abruptly. This scenario means that there will not be a transition period in place when the UK withdraws from the EU. For example, the UK will become a ‘third-country’ in relation to the bloc.
In this case, the TPR will come into force on exit day for a maximum of three years within which the EEA financial services firms operating in the UK. Furthermore, brokers marketing passported funds will be required to obtain authorization in the UK.
How the TPR will work
EEA-based firms that currently access the UK market through passporting licenses can do so by notifying the FCA of their wish to enter the temporary regime to continue their regulated activities within the scope of their current permissions. Thereafter, they will need then apply for a full authorization during the TPR period.
As more information emerges about what Brexit will mean for brokers, firms need to make sure they understand the implications and plan accordingly. If firms are unsure of what to expect or what they need to do, they should visit the Brexit pages on the FCA website.
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