FCA Urges Financial Services Companies to Ensure Readiness for Brexit

​​With one week to go until the end of the Brexit transition period, the UK's Financial Conduct Authority (FCA) is urging financial services companies to ensure they are ready.

The Brexit transition period ends at 11p.m. on 31 December 2020. After this point, EU law will no longer apply in the UK. For many financial services businesses, this will mean changes to existing systems and services. The FCA expects firms to have ensured they have assessed the impact on them and their customers, and have taken action so they are ready for the end of the transition period.

As part of the FCA's preparations, the FCA will be making changes to the Financial Services Register. This is to take account of the end of passporting for firms and funds and the start of the temporary permissions regime (TPR). To make these changes, the register will be unavailable from late evening 31 December to early morning 4 January.  

Nausicaa Delfas, Executive Director for International at the Financial Conduct Authority said: "With only a week to go, firms should have taken all the necessary steps to prepare for the end of the transition period. At the FCA we have been working closely with other agencies in the UK and Europe, as well as with businesses, to ensure customers are protected and markets work well."

​The TPR will allow EEA-based firms passporting into the UK to continue operating in the UK within the scope of their current permissions for a limited period, while they seek full FCA authorisation, if required. The deadline for EEA firms to notify the FCA they want to enter the TPR closes on 30 December 2020.

In addition, the FCA and other UK authorities have also introduced the financial services contracts regime (FSCR). This will allow EEA passporting firms that do not enter the TPR to wind down their UK business in an orderly fashion.

When passporting ends at the end of the transition period, the extent to which UK firms can continue to provide services to customers in the EEA will be dependant on local law and local regulators' expectations. The FCA expects UK firms to take the steps available to them to ensure they act consistently with these local laws and expectations. The FCA is clear that firms' decisions need to be guided by obtaining appropriate outcomes for their customers, wherever they are based.