FCA update – rules published for revised UK regulation after transition period
- On 1 October 2020, the FCA 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 the FCA 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.
- The FCA intends to apply the TTP on a broad basis 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 caused by onshoring.
- The FCA expects firms to use the duration of the TTP to prepare for full compliance with changes to UK regulatory obligations by 31 March 2022.
The FCA has explained that there are areas where it would not be appropriate to grant relief at the end of the transition period, including where doing so would not be consistent with its statutory objectives.
By reviewing the new Handbook site, alongside the updated TTP information, firms will be able to see which changes will apply to them.
In some key areas, the FCA expects firms and other regulated persons to be preparing to comply with changed obligations ready for 31 December 2020:
- 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
- Electronic commerce EEA firms
- Mortgage lending after the transition period against land in the EEA
- Payment Services – strong customer authentication and secure communication
Timeline with relevant dates to be logged on regulatory calendar
- By 31 December 2020, all firms need to have prepared fully and implemented internal changes for changed regulatory obligations.
All firms need to review guidance and work closely with their FCA contacts.