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27 June 2018

The FCA’s role in preparing for Brexit

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Further to the announcement from HM Treasury on its approach to amending financial services legislation under the European Union (Withdrawal) Act, this statement provides stakeholders with an update on how the FCA is preparing for the UK leaving the European Union.

We continue to prepare for a range of scenarios, including one in which the UK leaves the EU on 29 March 2019 without a withdrawal agreement and implementation period having been ratified between the UK Government and the EU.

The EU (Withdrawal) Act will transfer and convert existing EU law at the point of exit into UK law. It also gives powers to ministers to make secondary legislation to amend this legislation to ensure it functions effectively when the UK leaves the EU.

As part of this, the Treasury intends to task us with amending and maintaining EU binding technical standards (detailed EU rules). These rules sit underneath EU regulations and directives and provide technical detail of how those requirements must be met.

We will also be amending our Handbook to ensure it is consistent with changes the Government is making to EU law and it functions effectively when the UK leaves the EU. In the run up to March 2019, we will limit Handbook changes unrelated to Brexit to those identified as core priorities in our Business Plan as well as other essential items.

We plan to consult on these changes in the Autumn, subject to the Treasury’s timelines for Statutory Instruments (SIs). We also plan to consult on the rules which will apply to firms in the temporary permissions regime.

Given the scale of the Handbook changes needed for Brexit, our rule making outside that context will focus on our core priorities as set out in our Business Plan. This will help us to ensure that our Handbook functions effectively on exit day and will enable stakeholders to absorb and adapt to changes to the Handbook as a result of Brexit.

We will continue to progress important initiatives, such as our High-Cost Credit Review, the implementation of the Senior Managers and Certification Regime and next steps from our Asset Management Market Study. We will delay our rule making for some initiatives, such as our work on illiquid assets or the remit of Independent Governance Committees.

Full statement


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