EU Withdrawal – Transitional period for new rules

EU Withdrawal – transition period for new FCA rules to apply
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, namely 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.
 

Some changes will apply from 31 December 2020
There are areas where it would not be appropriate for the FCA to grant relief at the end of the transition period. Those key areas include: 

  • MIFID II transaction reporting
  • EMIR reporting obligations
  • SFTR reporting obligations
  • Certain requirements under MAR
  • Issuer rules
  • Contractual recognition of bail-in
  • Client Assets Sourcebook requirements (CASS)
  • Market-making exemption under the Short Selling Regulation
  • Use of credit ratings for regulatory purposes
  • Securitisation
  • Electronic commerce EEA firms
  • Mortgage lending after the transition period against land in the EEA
  • Payment Services – strong customer authentication and secure communication

Most of these will not apply to the typical adviser firm but it is for firms to assess whether any do apply. In these key areas, the FCA expects firms and other regulated entities to prepare now to comply with the changes to their regulatory obligations by 31 December 2020.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

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Action Required By You

  • Firms where any of the aspects listed above apply will need to ensure any applicable rule changes are implemented from 31 December 2020;
  • Otherwise, most adviser firms will not need to do anything immediately but should use the transitional period up to 31 March 2022 to prepare as necessary for other changes;
  • Contact ATEB to discuss any queries around the transition to onshored regulations.

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Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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