FCA cautions firms to take ‘reasonable steps’ to prepare for 31 October

While it is aware that leaving the EU during the working week could pose operation challenges, the FCA has urged firms to prepare, advising them that it will take “a proportionate and pragmatic approach to supervising reporting around exit day”.

Alongside this, if the UK leaves the EU without a deal, passporting will end.

The FCA advised that any EEA passporting firm wishing to continue operating in the UK will need to notify the authority by 30 October that they wish to enter the Temporary Permissions Regime (TPR).

“The FCA has been preparing to ensure UK financial services are well placed if the UK leaves without a deal,” Nausicaa Delfas, executive director for international at the Financial Conduct Authority said.

“We have set out steps certain firms need to take – it is important that firms are as prepared as possible if there is a no-deal exit, and that they are aware of what they need to do.”

The FCA explained that MiFID transaction reporting is a crucial part of its approach to market oversight. Firms that are not able to comply fully with the regime at the time of the UK’s withdrawal from the EU will need to be able to back-report missing, incomplete or inaccurate transactions.

This, it said, should be completed as soon as possible after 31 October 2019.

On EMIR reporting, FCA-registered trade repositories (TRs) are advised to be ready to receive reports from UK reporting counterparties and be in a position to share these with UK authorities.

“FCA-registered trade repositories must ensure the migration of outstanding trades and historic EMIR data, and that the details of any trades newly concluded, terminated or modified by UK reporting counterparties on 1, 2, and 3 November 2019, are embedded in their systems,” the FCA said.

According to the FCA, these need to be available for UK authorities by 4 November 2019.  

“UK reporting counterparties should ensure details of derivative transactions that are concluded, terminated and/or modified on 30 and 31 October 2019, which cannot be reported before the point of exit, are reported to an FCA-registered TR by no later than 4 November 2019,” the authority concluded.