Brexit/UK Developments

On April 12, the UK Financial Conduct Authority (FCA) published amended directions, dated April 11, on notifications regarding the temporary permissions regime (TPR). Although the deadline for Brexit has been agreed upon by the United Kingdom and the 27 remaining EU member states as being no later than October 31, the amended directions extend the deadline for firms to notify the FCA if they wish to enter the TPR from April 11, to May 30. The TPR will go into effect upon Brexit taking effect, if there is no transition period (as reported in the January 11, 2019 edition of the Corporate & Financial Weekly Digest).
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On March 29, the UK Financial Conduct Authority (FCA) issued a press release announcing that it has signed two updated memoranda of understanding (MOUs) with the Securities and Exchange Commission. Both MOUs aim to ensure the continued ability of the United Kingdom and the United States to cooperate and consult with each other regarding the effective and efficient oversight of regulated entities across national borders.
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On March 29, the UK Financial Conduct Authority (FCA) issued a press release announcing that it had published its final instruments and guidance that will apply if the United Kingdom withdraws from the European Union without a deal or an implementation period (No-Deal Brexit).
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On March 25, the UK Financial Conduct Authority (FCA) updated its webpage on the temporary permissions regime (TPR) to announce that it intends to extend the notification window for European Economic Area (EEA) firms and fund managers wishing to enter the TPR to the end of April 11. On March 26, the UK Prudential Regulation Authority (PRA) also updated its webpage on the TPR to make an equivalent announcement. (For more information on the TPR, please see the Corporate & Financial Weekly Digest edition of January 11, 2019.)
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On March 19, the European Securities and Markets Authority (ESMA) published a statement on the impact on the Markets in Financial Instruments Regulation (MiFIR) trading obligation for shares (TO) if the United Kingdom left the European Union on March 29 (Brexit) without a withdrawal agreement (no-deal Brexit) and without an equivalence decision for the United Kingdom made by the European Commission.
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On March 19, the European Securities and Markets Authority (ESMA) published a press release announcing the results of the annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds. ESMA’s publication had originally been planned for March 1, but was postponed as its IT systems required more time than anticipated to complete the calculations, as reported in the Corporate & Financial Weekly Digest edition of March 8, 2019.
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On January 24, the Bank of England updated its financial market infrastructure supervision websites with interim lists of entities and systems that will enter into the various temporary or transitional arrangements on exit day should the United Kingdom leave the European Union with no implementation period. The lists consist of:

  • Third-country central counterparties (CCPs) that will offer clearing services and activities in the UK under the temporary recognition regime of the Central Counterparties (Amendments, etc., and Transitional Provision) (EU Exit) Regulations 2018;
  • Third-country central securities depositories (CSDs) that will provide CSD services in the United Kingdom using the transitional provisions of the Central Securities Depositories (Amendment) (EU Exit) Regulations 2018; and
  • European Economic Area (EEA) systems whose operators have indicated their intention for such systems to receive settlement finality protection in the United Kingdom pursuant to the draft temporary designation regime of the Draft Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019.


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On January 15, a draft version of the Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019, which have been laid before Parliament, was published together with a draft explanatory memorandum.

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On January 9, a draft of the Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (Draft Regulations 2019) was published together with a draft explanatory memorandum.

The purpose of the Draft Regulations 2019 is to ensure that the regime established under EU Regulation on Key Information Documents for PRIIPs (PRIIPs Regulation) continues to operate effectively after the United Kingdom’s withdrawal from the European Union (Brexit).
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