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FCA Update – EU withdrawal transition period until 1 January 2021

FCA update: EU withdrawal transition period until 1 January 2021

Background

  • The UK left the EU on 31 January 2020 with a Withdrawal Agreement.
  • It has entered a transition period which is due to operate until 31 December 2020.
  • The FCA will provide more information and updates about its expectations of firms, as these details become available.
  • FCA relevant webpages are available at fca.org.uk/brexit
  • During the transition period, EU law continues to apply in the UK.
  • New EU legislation that takes effect before the end of the transition period will also apply to the UK.

Impacts

The UK and the EU have indicated, in a Political Declaration, that they intend to reach agreement on the future relationship between the UK and the EU by the end of 2020. The UK government has indicated it does not intend to extend the transition period.

The FCA will be working hard with the UK government and other regulators to ensure that it and the UK financial services sector are prepared for the end of the transition period.

The FCA will also continue to work with the European Supervisory Authorities, national authorities in member states and European policymakers on shared issues and priorities.

Firms must consider:

  • Passporting allows firms authorised in an EEA state to conduct business within other EEA states based on their ‘home’ member state authorisation. Passporting will continue during the transition period.
  • Firms should not expect current passporting arrangements to continue after the transition period ends.
  • Firms should anticipate a range of possible scenarios for the end of the transition period, including that current activities might no longer be covered.
  • Consumers’ rights remain the same during the transition period
  • During the transition period, EU law continues to apply until 31 December 2020.

Timeline with relevant dates to be logged on regulatory calendar

  • End of transition period on 31 December 2020
  • Start of new regulatory conditions from 1 January 2021

Next steps

You will need to consider how the end of the transition period will affect you and your customers, and what action you may need to take to be ready for 1 January 2021.

The FCA will provide further information as and when there are material developments.

The FCA has a dedicated telephone line on 0800 048 4255. The line is open Monday, Tuesday, Wednesday and Friday 9am to 5pm, and Thursday 9.45am to 5pm.

Click here if you would like to get in touch with us.