The FCA has published a consultation paper (CP18/28) proposing changes to the FCA Handbook and to binding technical standards (BTS) to address deficiencies arising from Brexit. The FCA’s power to make these proposals stem from the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018. The FCA expects that the proposals in the consultation paper will affect all of its stakeholders. It states that the proposals aim to correct deficiencies arising from Brexit and not revisit policy decisions.
The consultation paper:
- sets out the FCA’s approach to reviewing the Handbook and BTS (Chapter 2);
- discusses a range of cross-cutting issues (Chapter 3);
- explains the Handbook proposals (Chapter 4)
- Section 4.1 includes a table of amendments
- Section 4.2 covers proposals to amend the Prudential Standards sourcebook
- Section 4.3 covers proposals to amend parts of the Conduct of Business sourcebook
- Section 4.4 covers changes to the fund management sector, principally amendments to both the Investment Funds sourcebook and the Collective Investment Schemes sourcebook;
- outlines BTS proposals (Chapter 5); and
- explains how the FCA intends to treat EU non-legislative material, such as Guidelines and Q&As issued by European Supervisory Authorities and their predecessor bodies (Chapter 6).
In the event the UK and the EU agree on the terms of the withdrawal agreement and there is an implementation period, the amendments proposed in this consultation paper will not come into effect on 29 March 2019. In this case, changes made to the Handbook and BTS post-implementation period will depend on the negotiation outcomes between the UK and EU.
The FCA aims to publish a second consultation paper in the autumn of 2018 covering BTS and parts of the Handbook affected by Brexit SIs which are due to be published in due course. The deadline for responses to CP18/28 is 7 December 2018. The FCA intends to publish feedback on this in early 2019 and also publish final versions of the materials consulted on or before 29 March 2019.