This decision — which reflects the extension of Article 50 — aims to minimise disruption for firms and other regulated entities if the UK leaves the EU without a withdrawal agreement.
Currently, under the power, firms don’t need to prepare to meet the changes to their UK regulatory obligations that are connected to Brexit.
“The temporary transitional power is a key part of our contingency planning if the UK leaves the EU without an agreement,” said Nausicaa Delfas, executive director of international at the FCA.
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“This extension should give firms and other regulated persons the time they need to phase in any regulatory changes they may need to make as a result of 'onshored' EU legislation.
“The power will provide certainty, ensure continuity and reduce the risk of disruption.”
Nausicaa added that there were some areas where it would not be appropriate to phase in the changes.
“For example, reporting rules under MiFID II, as receiving these reports is crucial to our ability to ensure market oversight and the integrity of financial markets.
“In these few areas only, we still expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by exit day.”