The FCA has stepped up efforts to make sure financial firms are ready for a ‘no-deal’ Brexit as the Government released ‘Operation Yellowhammer’ documents showing worst-case scenarios.
The regulator says it is “stepping up its efforts to ensure firms are aware of what they need to do prepare for the potential of a no-deal Brexit”.
Firms which have not prepared appropriately may risk an impact on their business, the FCA says.
The regulator will be running a series of digital adverts signposting to the FCA Brexit webpages and has set up a dedicated telephone line (0800 048 4255).
This is the most recent phase of preparations for a no-deal.
The FCA urged all firms to consider the implications of a no-deal exit and finalise their preparations.
This is particularly relevant for firms that:
• are a UK business which does any business in the EEA
• passport into the UK and have not notified the FCA for entry into the Temporary Permissions Regime
• have consumers in the EEA
• transfer personal data from the EEA
The release of the Operation Yellowhammer documents, after a Humble Address in the House of Commons before it was prorogued this week, did not include extensive reference to the financial sector, but did state: “A small minority of insurance payments from UK insurers into the EU may be delayed.”
Nausicaa Delfas, executive director of international at the FCA, said: “The FCA has undertaken significant work to prepare for the UK’s departure from the EU.
“We have published extensive information on our Brexit pages and held events, reaching firms and trade organisations around the country.
“We expect firms to ensure they are ready if there is a no-deal.
“If firms haven’t finalised their preparations, there is a risk they could be impacted. Firms should consult the information on our website.”
The FCA, working with the Government, says it has put in place a number of measures to minimise the potential for disruption, for example Temporary Transitional Powers and the Temporary Permissions Regime.
Brexit will also result in the loss of passporting for UK firms doing business in the EEA.
Whether firms need regulatory permissions to continue to do business in an EEA country will depend on the activity they are carrying on, the local law and the approach of the local authorities in that jurisdiction.
The regulator says firms should “make themselves aware” of any transitional regimes, with deadlines or registration requirements attached to them, that have been put in place by relevant EU Member States.
Firms should also consider any regulatory changes that could apply in the event of no deal, for example, MiFID II transaction reporting will change and firms should be ready to implement this.
In the event of no-deal there will be a number of changes to the FCA Handbook, the Temporary Permissions Regime will come into force, and the FCA will become responsible for Credit Ratings Agencies and Trade Repositories.
Firms should take note of these changes in advance, the FCA warned.