In this paper, we publish our proposals on how we will amend our Handbook and EU derived binding technical standards (BTS) if the UK leaves the EU without an implementation period in place. We also set out our proposed approach to EU non-legislative material such as Level 3 Guidelines and Q&As.
We are planning for a variety of outcomes to the Brexit negotiations. One of these outcomes is the UK leaving the EU on 29 March 2019 without an implementation period. If this happens, we must ensure there is a functioning regulatory framework in place.
For this scenario, we will need to amend our Handbook in line with the Government’s legislative changes and to reflect the UK’s new position outside the EU. In the same way, we will need to amend EU binding technical standards, which are detailed EU rules, for which we will gain responsibility.
For the most part, the amendments proposed are straightforward changes that update references to:
- EU legislation
- UK law which relates to or refers to the EU
- EU institutions and concepts
- the European Economic Area (EEA)
In a small number of cases we have found more than one solution to resolve an issue. Where this is the case we set out our chosen proposal and welcome feedback on our proposed approach.
All our proposals are aimed at ensuring our Handbook and the BTS continue to function when the UK is no longer a member of the EU.
We do not propose wider policy changes and are not making other changes unrelated to Brexit to our Handbook or to BTS.
BTS related to capital requirements
This consultation covers amendments to BTS in relation to the Capital Requirements Regulation and Directive which we share responsibility for with the PRA. FCA-authorised firms should take account of the PRA’s Consultation Paper 26/18 for the detail of the proposed amendments. You can provide any responses to our consultation either directly to us or to the PRA. We will share responses with each other but encourage firms to respond to the PRA where possible.
See CP18/28 (PDF) - in particular paragraphs 5.38–5.41 - for more information.
Who this applies to
Given the breadth of our proposals, this consultation affects a significant number of entities we regulate. Consequently, we want to hear from the widest possible range of stakeholders across sectors, including industry bodies and consumers.
This paper covers proposed amendments to a significant proportion of our Handbook, including:
- prudential rules for firms regulated only by us (not firms regulated jointly by us and the PRA)
- conduct of business rules
- rules for UK funds and fund managers covered by EU fund management legislation (eg UCITS and AIFMD)
- rules affecting other market participants, including UK investment firms covered under EU markets legislation (eg MiFID)
In Chapter 4 we list stakeholders by the Handbook sourcebook that interests them.
This paper also covers amendments to BTS relating to:
- markets and financial market infrastructure
- fund management
- credit ratings agencies and trade repositories (entities which we will have a new responsibility for supervising after Brexit)
- short selling practices.
The paper also sets out our approach after Brexit to EU non-legislative material, and so will be of relevance to any stakeholders with an interest in such material.
25/10/2018: Link added Added link to PRA Consultation Paper 26/18