Nausica Delfas, the FCA’s Executive Director of International delivered a speech on, amongst others, Brexit:
“The UK and the EU will begin discussions on the future relationship including the Political Declaration commitments to conduct mutual equivalence assessments by mid-2020.
Firms still need to ensure they are prepared for a range of scenarios that may happen at the end of 2020 – and this includes the scenario in which the activities they conduct might not be covered by agreements reached between the UK and the EU.
As we [the FCA] have done over the past three years, we will keep firms and consumers updated during 2020.”
Please note that EU law will continue to apply in the UK during the transition period. Passporting is set to continue, as are consumer rights and protections derived from EU law. New EU legislation which takes effect before the end of the transition period will also apply to the UK.
Further clarification is expected in June 2020 when it will become clear whether this transition period will need to be extended (by up to 1 or 2 years). As the Halloween Brexit deadline looms and there is still no clarity as to what will happen, Gem encourages all their clients and contacts to prepare for a no-deal scenario. Below are a list of resources and points to consider:
Brexit is not just about financial services but all aspects of business conducted outside of the UK. Therefore this is something that each firm should review taking into account its own arrangements. We recommend that if not already done so, that you document a risk assessment in relation to a no-deal Brexit. This should consider what, if any, activities (whether regulated or not) you carry out when acting outside of the UK/in the EU and/or what communications that you make when outside of the UK and/or that you make from the UK to EU based entities including clients and suppliers.
All contracts, policies and other internal and external documents must be updated to reflect updated legislation. We therefore also recommend that you liaise with your firm’s legal advisers on any advice that they are able to provide.
Sanctions: If there’s no deal, the UK will look to carry over all EU sanctions at the time of our departure. The government will implement sanctions regimes through new legislation, in the form of regulations, made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Sanctions Act will provide the legal basis for the UK to impose, update and lift sanctions after Brexit.
Information for financial institutions if there’s no Brexit deal: Firms based in the UK will lose access to the EU ‘Passport’ which could include both passporting regulated activities and/or marketing funds - if you are marketing funds in the EU, please discuss this with your fund lawyers
BVCA page on Brexit, includes information on EuVECA NPPR: FCA information on National Private Placement Regime
EU Settlement Scheme: employer toolkit Right to work checks on EU citizens if the UK leaves the EU without a deal
Please don’t hesitate to get in touch with us if we can help.
This newsletter contains generic information and has been generated for professional clients and associates of Gem Compliance Consulting Limited only and should not be regarded as advice. We will not be liable for loss, however caused by parties acting on the information contained herein.
