The Financial Conduct Authority (FCA) has updated its rules ahead of the Brexit transition period coming to an end. While the new rules will apply from January 2021.
The FCA has said it will temporarily waive some of the rules, meaning businesses can continue to comply with existing requirements for a limited period – although it insisted there are some areas where it would not be appropriate for relief to be granted beyond December this year.
The FCA has published an updated version of the FCA Handbook to show the rules that will apply at the end of the transition period. It has also set out details on how it intends to use the Temporary Transitional Power (TTP).
The TTP gives the FCA flexibility as to how and when changes to its rules apply following the end of the transition period, allowing firms to transition to the new regime. Where it applies, the TTP means that firms and other regulated persons can continue to comply with their existing requirements for a limited period.
The FCA intends to apply the TTP on a broad basis from the end of the transition period until 31 March 2022. This means firms and other regulated persons do not generally need to prepare now to meet the changes to their UK regulatory obligations brought about by onshoring.
There are areas where it would not be appropriate for the FCA to grant relief at the end of the transition period, including where doing so would not be consistent with its statutory objectives. By reviewing the new Handbook site, alongside the updated TTP information, firms will be able to see which changes will apply to them.
Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority, said “We are approaching the end of the transition period, so firms should be completing their final preparations. To help firms to prepare and provide clarity, we have published a version of our Handbook that will apply from the end of this year, which includes the changes made through the onshoring process.”
“We have also set out further details on the Temporary Transitional Power (TTP). The power will in most cases give firms more time to adapt to their new obligations. There are some areas where it would not be appropriate for us to apply the TTP, including where doing so could run counter to our objectives: in those key areas, we continue to expect firms and other regulated entities to prepare now to comply with the changes to their regulatory obligations by 31 December 2020.”
The FCA expects firms to use the duration of the TTP to prepare for full compliance with changes to UK regulatory obligations by 31st March 2022.
Responding to the FCA announcement Conor Lawlor, UK Finance Director, Brexit; Capital Markets & Wholesale said:“Clear guidance is vital for firms to better understand their requirements and obligations from January 1 2021. Today’s update from the FCA sets out how these rules will apply at the end of the transition period. The regulator also acknowledges the scale, complexity and magnitude of some of the changes in relation to key requirements, reiterating its intention to act proportionately towards firms.”