The European Union (Withdrawal) Act is now law in the UK, meaning that existing EU laws that affect the UK will be automatically incorporated into UK law on March 29 2019, the date on which the country will leave the EU.
The Act also gives the Government the power to make secondary legislation, which is necessary as the wording of some of these EU laws will need to be amended to reflect the UK’s new status.
However, whilst provisional agreement has been reached on a post-Brexit transition period, to last until December 31 2020, this has not been ratified by the EU states. Additionally, there is still much uncertainty about the nature of the future trading relationship between the UK and the EU.
The Financial Conduct Authority (FCA) says it is preparing for the possibility of a ‘no deal’ scenario, where the UK would exit the EU on March 29 without a trade agreement, or any agreement for a transition period.
The FCA also emphasises that it will need to make changes to its Handbook to take account of the changes the Government is to make to existing EU law. The regulator will consult in autumn 2018 on these changes, and in the meantime, to reduce the burden on firms, it promises to keep other rule changes to a minimum.
The FCA’s statement of June 27 2018 says it will “limit Handbook changes unrelated to Brexit to those identified as core priorities in our Business Plan as well as other essential items.”
Should final agreement for a transition period be obtained, then EU law would continue to apply in the UK until the end of 2020, and the existing financial services passporting regime would continue to operate throughout the transition period. This means that any firm authorised in the UK should continue to expect to be able to trade in EU countries until 2020, and firms authorised by other EU national regulators would also be able to trade in the UK under the terms of their passport until 2020.
A separate release from the Treasury states that:
“The government is confident that the implementation period, agreed between the UK and the EU earlier this year, will be in place between 29 March 2019 and 31 December 2020.”
It goes on to say that:
“Firms should continue to plan on the assumption that an implementation period will be in place from 29 March 2019 – and, therefore, that they will be able to trade on the same terms that they do now until December 2020.”
The FCA also highlights that its planning for Brexit will not affect its plans to introduce the Senior Managers & Certification Regime across the industry, nor will it delay implementation of the recommendations of the high-cost credit review.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article