The UK Government has published its final batch of technical notices on the impact of a “no deal” EU exit on 29 March 2019. The FCA has also published two consultation papers in relation to Brexit.
No deal technical notes
As explained in our blog post on the first batch of technical notices (see here), the UK’s notes contain information on what the UK Government plans to do, unilaterally, to assist affected businesses and individuals through temporary waivers and derogations. They also set out actions for businesses.
The latest notes include one on Structuring your business, which covers topics such as:
- Branches – The regime for EU companies with branches in the UK will remain substantially the same post Brexit but there are likely to be changes for UK companies operating in the EU. These could include having to meet additional requirements in order to acquire real estate and requiring additional approvals to operate.
- Loss of limited liability – UK companies and limited liability partnerships that have their central administration or principal place of business in an EU Member State which operates the “real seat” principle of incorporation (such as Germany) may no longer have their limited liability recognised in that Member State.
- EU cross-border mergers – These will no longer be possible where one party is UK incorporated (although they can be structured through private contractual arrangements).
- Societas Europaea (SEs) – Societas Europaea will no longer be able to registered in the UK. The government will put in place a way of automatically converting them into a new UK corporate structure so that they will have a clear legal status post Brexit.
There is also a note on Accounting and audit, which says that certain exemptions in the Companies Act 2006 relating to the preparation of individual accounts will no longer be extended to companies with parents or subsidiaries incorporated in the EU. It also notes that UK companies with branches in, or listed in, other EU Member States will need to consider the impact of Brexit on the accounting requirements in those jurisdictions.
Other topics covered in the new notes include sector-specific areas such as rail, and notes on Consumer rights and Providing services including those of a qualified professional.
FCA consultation papers
The FCA’s two consultation papers set out some of its proposals in the event of a no-deal Brexit on 29 March 2019.
The two consultation papers focus on:
- Amendments to the FCA Handbook and binding technical standards (that is detailed EU rules which will be incorporated into UK law and for which the FCA will have responsibility after Brexit) to deal with deficiencies resulting from leaving the EU (Consultation Paper CP18/28). The changes will amend definitions, such as EU regulated market, and references to EU law or institutions (such as ESMA). The paper also sets out the FCA’s proposed approach to EU non-legislative material such as Level 3 Guidelines and Q&As, which the FCA says that it will continue to expect firms and issuers to follow in the UK post-Brexit.
- Providing for a Temporary Permissions Regime, which will allow EEA firms and funds currently passporting into the UK to continue operating here for a limited period after Brexit while seeking full UK authorisation (Consultation Paper CP18/29).
The consultations close on 7 December 2018. The FCA will publish another consultation on further amendments to the FCA Handbook later in the autumn, once additional statutory instruments giving the FCA the power to make the requisite amendments have been published.