As exit day dawns upon us and with little certainty as to whether we’ll secure a deal, it’s an understatement to say that we are in uncertain times.
Over the last few months we’ve seen the UK government publish a White Paper which has not provided much clarity for financial services firms and negotiations are still underway.
Yet in the midst of all this, the FCA has reiterated the need for firms to make meaningful preparations.
Impact assessment
If you are not sure whether Brexit will affect your business, here are some questions to consider:
If you answered yes, to any of the above, below are 5 key tips to help you prepare in this time of uncertainty:
Temporary permissions regime (TPR)
If you are an EEA firm or fund operating in the UK under a passport, the Government is introducing a Temporary Permissions Regime (TPR). The TPR will take effect if the UK leaves the EU without an implementation period. This will allow firms and funds to continue operating in the UK within their current scope of permissions for a limited period after exit day. Firms who wish to operate under the TPR must notify the FCA by 28 March 2019.
Treating Customers Fairly
As firms start to make preparations for Brexit it is vital to ensure that customers are treated fairly, regardless of where they are based. This includes notifying customers whether there will be changes to your ability to provide services and/or goods to them after Brexit. Firms should let consumers know whether their rights to access the Financial Ombudsman Service (FOS) and/or Financial Services Compensation Scheme will be affected. Any changes communicated to customers should be done in a way which fair, clear and not misleading.
Data sharing
Just as firms get to grips with GDPR, many UK firms may face even more challenges regarding data sharing after Brexit. If the UK leaves the EU without a withdrawal agreement the Government has stated that the UK will continue to allow the free flow of data from the UK to the EEA after 29 March 2019. However, it is unclear whether there could changes to the legality of transferring personal data from organisations in the EU to the UK.
The FCA has stated that, when planning,firms should consider:
Contract continuity
For UK firms who will no longer be able to operate under a passport in the EEA, it is important for them to consider what permissions they may require to continue operating in the EEA. Firms must ensure that they decide how they will continue to provide services to customers under existing contracts. It will be necessary for firms to consider local laws and local regulators’ expectations. For UK firms that do not operate in the EEA, it may also be necessary to review contracts that refer to EU law particularly if no implementation period is agreed which will result in EU law no longer being enforceable in the UK.
Prepare for 'deal' or 'no-deal' brexit
A significant point to note is that firms will be expected to consider the implications of a range of possible scenarios and how it will affect their business. This includes the absence of a deal or any implementation period. When considering these various scenarios firms should consider how it will impact them and their clients and make adequate preparations.
Next Steps
Our team of regulatory advisors are on hand to help you make meaningful preparations for Brexit.
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