With less than one month to go until the end of the Brexit transition period, the UK’s Financial Conduct Authority (FCA) has issued a statement reminding firms to be prepared.
The transition period ends at 11pm on 31 December, after that time UK based financial institutions (FIs) will see a number of changes to their regulatory environment. Most importantly, the FCA points out that EU laws will no longer apply and passporting will end.
In a bid to help firms understand their new obligations, the regulator has published “extensive information” on their website. It has updated its Handbook to reflect the new regulatory requirements that will come into force and set out guidance on the action that firms will need to take.
Commenting on the end of the transition period, Nausicaa Delfas, Executive Director of International at the FCA said:
“Firms need to make sure they are prepared for the end of passporting, and for the new financial services landscape after the end of the transition period. To help minimise disruption, we have onshored EU legislation and established temporary regimes to allow non-UK firms and funds to operate in the UK after 31 December 2020. We remain committed to open markets, international co-operation and high international standards of regulation.”
Brexit has been in the works for over four years, but as the end of the transition period approaches, time seems to have sped up for many. As the world waits with bated breath for a potential deal to be struck, financial institutions will be looking to understand their new regulatory obligations come 1 January 2021.
As we move towards the end of 2020, we hear promising news of a covid vaccine. It is hoped that 2021 will be a year of greater stability and clarity. However, with Brexit on the horizon, not much is certain. What is clear, however, is that firms will be expected to manage a swathe of new or altered regulatory obligations in a post-Brexit world. This, paired with an unfreezing of regulatory developments in 2020 owing to the pandemic, could mean that next year will be a year of mass regulatory change. If firms are using tired or outdated processes to approach regulatory change management, they may struggle to keep pace. Automated, artificial intelligence-based solutions may be the only tool up to the challenge.
Stay tuned for more content on navigating the post-Brexit regulatory landscape, coming in the New Year.