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FCA PS 30 April 2020 – Brexit and temporary transitions TTP

FCA PS – Temporary Transitional Power and Brexit

Background

  • Temporary Transitional Power directions and Brexit Policy Statement (PS19/5); first published on 28 February 2019; updated 30 April 2020.
  • This Policy Statement explains how the FCA intends to use the Temporary Transitional Power (TTP).
  • HM Treasury published a written ministerial statement on 25 March 2020, outlining its intention to retain the regulators’ Temporary Transitional Power (TTP), and shift its application so that it is available for use by the UK financial services regulators for a period of 2 years from the end of the transition period.
  • The FCA confirms that, after the transition period, it intends to apply the TTP on a broad basis and to the same areas previously communicated. The FCA intends to grant transitional relief from the end of the transition period until 31 March 2022.

Impacts

This means that regulatory obligations on firms will generally remain the same as they were before the end of the transition period for that temporary period.

It also means that, generally, UK regulated firms will not need to complete preparations to implement changes in UK law arising from the end of the transition period by December 2020.

In the previously-advised areas where the FCA will not grant transitional relief, the FCA expects firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by the end of the transition period. The detail of how and to what the TTP applies will be set out in the annexes to the TTP directions.

Examples without transitional relief include: firms subject to the MiFID II transaction reporting regime; firms subject to reporting obligations under EMIR; and EEA Issuers that have securities traded or admitted to trading on UK markets.

In addition, existing transitional arrangements such as, for example, the temporary permissions regime (TPR) will operate from exit day.

Timeline with relevant dates to be logged on regulatory calendar

  • FCA PS (policy statement) was published on 30 April 2020
  • Transitional relief will be granted from the end of the transition period until 31 March 2022

Next steps

The FCA notes that, given the breadth of expected changes set out in this Policy Statement, the FCA expects many of its stakeholders to be affected.

The FCA may publish a further set of TTP directions later in the year if the withdrawal agreement between the UK and the EU is not ratified.

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