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End of Brexit transition period

Recent UK and EU regulatory announcements

9 December 2020

Bank of England

Financial services topic area Measure Date Detail
Temporary Recognition Regime Update/change Nov-20 Non-UK CCPs in TRR will have 18 months (instead of 6 months) to apply for recognition under UK EMIR.

 

Bank of England/PRA

Financial services topic area Measure Date Detail
Temporary transitional power Updated webpage 22-Sep-20 The Bank and PRA intend to use the TTP to provide broad transitional relief, with key exceptions, for 15 months after the end of the transition period, until Thursday 31 March 2022 (the TTP period).
TPR operational readiness Dear CEO letter 1-Sep On 1 September 2020, the Prudential Regulation Authority (PRA) published a Dear CEO letter to remind firms to be operationally ready for the Temporary Permissions Regime (TPR).

 

EBA

Financial services topic area Measure  Date Detail
Brexit contingency planning Statement 9-Nov-20 The EBA reminds financial institutions of the need for readiness in view of the Brexit transition period ending on 31 December 2020.

 

ECB

Financial services topic area Measure  Date Detail
Booking models and risk management Interview with Yves Mersch (Member of the ECB Executive Board) 25-Nov-20 EU products and transactions with EU clients should be booked in the EU. Risk management capabilities related to these products should also be located in the EU.

 

ESMA

Financial services topic area Measure  Date Detail
Derivatives trading obligation Statement 25-Nov-20 The statement clarifies that the DTO will continue applying without changes after the end of the transition period. ESMA considers that the continued application of the DTO would not create risks to the stability of the financial system.
EMIR and SFTR reporting the operation of ESMA databases and IT systems Updated statements 10-Nov-20 Statement on issues affecting EMIR and SFTR reporting – covering issues affecting reporting, recordkeeping, reconciliation, data access, portability and aggregation of derivatives under Article 9 EMIR and of securities financing transactions reported under Article 4 of SFTR;
Statement on the use of UK data in ESMA databases and performance of MiFID II calculations – covering MiFID II/MiFIR publications performed by the various ESMA databases, as well as the annual ancillary activity calculations.; and
Statement on ESMA’s Data Operational Plan – covering actions related to FIRDS, FITRS, DVCAP, transaction reporting systems, and ESMA’s registers and data.
UK trading venues (TV) added to third-country TV opinion Updated list 27-Oct-20 ESMA has updated the list of third-country venues (TCTV) in the context of the opinions on post-trade transparency and position limits under MiFID II and MiFIR.
Share trading obligation Final position 26-Oct-20 The statement outlines that the trading of shares with a European Economic Area (EEA) ISIN on a UK trading venue in UK pound sterling (GBP) by EU investment firms will not be subject to the EU STO.
EMIR updated EMIR validation rules Statement 26-Oct-20 ESMA has postponed the applicability date of the updated EMIR validation rules from 1 February 2021 until 8 March 2021. This is due to technical issues related to the implementation of the rules in light of Brexit.
MiFID II/R Updated statement 1-Oct-20 ESMA has updated its position on the impact of Brexit on the application of MiFID/R. This includes confirmation that ESMA intends to assess UK venues for inclusion in the list of third-country venues for the purposes of post-trade transparency and commodity derivatives position limits, before the end of the transition period.

EU Benchmarks Regulation

Updated statement 1-Oct-20 ESMA has confirmed that EU supervised entities can use UK benchmarks until the end of the BMR transitional period (31 December 2021).
Recognition of UK CCPs Announcement of recognition decisions 28-Sep-20 ESMA announced that the three central counterparties (CCPs) established in the United Kingdom (UK) – ICE Clear Europe Limited, LCH Limited, and LME Clear Limited – will be recognised as third country CCPs (TC-CCPs) eligible to provide their services in the EU, after the end of the transition period following the withdrawal of the UK from the EU on 31 December 2020.

 

ESAs/ESMA

Financial services topic area Measure  Date Detail
Exemption for intragroup transactions from clearing/margining, equity options and novations to EU counterparties Final Report and new draft RTS 23-Nov-20 The amendments included in these draft RTS propose to extend the temporary exemption for 18 months for intragroup transactions.

 

European Commission

Financial services topic area Measure  Date Detail
Access to UK CCPs Equivalence decision (time-limited until 30 June 2022) 21-Sep-20 Time-limited equivalence for regulatory framework applicable to UK CCPs. During this period the Commission expects EU clearing members to reduce their exposure to UK market infrastructure.
Access to UK CSDs Equivalence decision (time-limited until 30 June 2021) 26-Nov-20 According to the Commission, the decision is intended to give EU CSDs more time to develop their offer of services in relation to Irish corporate securities and ETFs and EU issuers more time to migrate their positions to EU CSDs.

 

FCA

Financial services topic area Measure  Date Detail
Migration to FCA FIRDS and FITRS Update 4-Dec-20 FCA provided details on how they’re moving MiFID reference data and transparency systems away from ESMA as part of the MiFID onshoring process.
Brexit preparedness Statement 1-Dec-20 The FCA has reminded firms to be ready for the end of the transition period in 1 month’s time.
Notification of clearing thresholds for UK FCs and UK NFCs Statement 30-Nov-20 When UK EMIR comes into force at the end of the transition period, UK financial counterparties (FCs) and non-financial counterparties (NFCs) must notify FCA if they exceed the clearing thresholds under Article 4 of UK EMIR.
Intra-group exemptions from clearing and margining under UK EMIR Statement 30-Nov-20 To continue benefitting from existing exemptions, firms must submit notifications to FCA by 1 February 2021. This will ensure the FCA can review the notifications within the 3-month timeframe (for margin exemptions) and 30-day timeframe (for clearing exemptions) as prescribed in UK EMIR.
UK EMIR reporting Statement Nov-20 FCA have published an updated note highlighting their expectations for firms in relation to their UK EMIR reporting requirements immediately following the end of the transition period.
UK SFTR reporting Statement Nov-20 FCA have published an updated note highlighting their expectations for firms in relation to their UK SFTR reporting requirements immediately following the end of the transition period.
Information about Brexit from EEA regulators Information 6-Nov-20 This page provides links to dedicated Brexit websites hosted by financial regulators in EEA member states that FCA have been made aware of. The list is not exhaustive and FCA will update it when they have more information.
HMT announcement on equivalence Statement 9-Nov-20 The Treasury has announced its intention to take equivalence decisions in respect of the European Economic Area (EEA) states across a number of financial services areas. These will come into effect at the end of the transition period.
Share trading obligation Statement 4-Nov-20 FCA will use TTP to allow firms to continue trading all shares on EU trading venues and systematic internalisers (SIs) where they choose to do so, and where the regulatory status of those venues and SIs permits such activity.
EEA firms conducting business in the UK Updated statement Nov. 2020 The FCA has updated its existing statement on the preparations firms should undertake before the end of the Brexit transition period to provide specific guidance for EEA-based firms conducting business in the UK.
Further information on client money and custody assets for UK firms Updated statement Nov. 2020 The FCA has updated its webpage on considerations for UK firms arising from the end of the Brexit transition period to provide further information for firms with client money or custody assets.
Updated FCA Handbook and revised Temporary Transitional Powers Guidance/Update 1-Oct-20 The FCA has published an updated version of the FCA Handbook to show the rules that will apply at the end of the transition period. It has also set out details on how it intends to use the Temporary Transitional Power (TTP).
MiFID trade reporting and position limits Statement 1-Oct-20 FCA confirmed its previous position on MiFID II reporting and position limits.
TPR window re-opened Statement/update 30-Sep-20 The temporary permissions regime (TPR) will enable relevant firms and funds which passport into the UK to continue operating in the UK when the passporting regime falls away at the end of the transition period.
MiFID transaction reporting Market Watch 64 Aug. 2020 FCA FIRDS and FITRS testing and reminder of MiFID transaction reporting obligations.

 

FCA and PRA

Financial services topic area Measure  Date Detail
Final preparations for the end of the transition period Dear CEO letter 9-Oct-20 It is imperative that firms continue to build on their preparatory work to ensure that they, and to the extent possible their clients, are ready for a range of scenarios at the end of the transition period.

 

HM Treasury

Financial services topic area Measure  Date Detail
Equivalence decisions for EEA States Statement 9-Nov-20 On 9 November 2020 the Chancellor announced that the UK will be granting a package of equivalence decisions to the European Economic Area (‘EEA’) States, including the Member States of the European Union (‘EU’).

 

HM Treasury/PRA/FCA

Financial services topic area Measure  Date Detail
FS Bill - implementation of prudential reforms Joint statement 16-Nov-20 Joint statement on targeting the implementation date of 1 January 2022 for the implementation of the UK Investment Firms Prudential Regime and the Basel 3 reforms which reflect the UK equivalent of the outstanding elements of the amended Capital Requirements Regulation (CRR 2)).

 

HM Treasury/Office of Financial Sanctions Implementation

Financial services topic area Measure  Date Detail
Getting ready for the end of the transition period Blog post 1-Dec-20