October 25, 2021

Volume XI, Number 298

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October 25, 2021

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FCA Publishes Statement on Brexit

On December 20, 2017, the UK Financial Conduct Authority (FCA) published a statement on the UK’s withdrawal from the European Union (EU).

Referencing the announcement made by the European Council that enough progress had been made in negotiations to begin discussions on future trading relations (for further information please see the Corporate & Financial Weekly Digest of December 8, 2017), the FCA states that it welcomes the progress that has been made and is supportive of open markets and free trade in financial services, underpinned by strong regulatory standards.

The FCA goes on to state that while the final nature of any implementation period is yet to be agreed upon, it is anticipated that firms will be able to continue to benefit from passporting between the United Kingdom and the European Economic Area (EEA) after the point of exit and during an implementation period. The FCA will monitor the negotiations and provide further information to firms as appropriate.

The FCA also refers to HM Treasury’s announcement (also covered in this week’s Corporate & Financial Weekly Digest [“UK Government Plans To Ensure Continuity in Financial Services in the Event of No Deal With the EU”]) that, if necessary, it will legislate for a temporary permissions regime. This regime would enable relevant firms and funds to undertake new business within the scope of their permissions, continue performing their contractual rights and obligations, manage existing business, and mitigate risks associated with a sudden loss of permission. Firms and funds that are solely regulated in the United Kingdom by the FCA would need to notify the FCA of their wish to benefit from the regime before the day that the United Kingdom leaves the EU. However, the FCA states that this notification for temporary permission will not require submission of an application for authorization.

The FCA adds that UK-based firms servicing EEA clients should continue to prepare for a range of scenarios, and should discuss these arrangements and the implications of an implementation period with the relevant EU regulators. The FCA will keep its expectations under review as implementation period negotiations progress, and communicate to firms accordingly.

Finally, the FCA reminds firms that the United Kingdom remains an EU Member State until its formal withdrawal, and therefore all rights and obligations derived from EU law continue to apply. Firms must therefore abide by their obligations and continue with implementation plans for legislation that is still to come into effect.

The statement is available here.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 5
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About this Author

Carolyn Passen, copyright, trademark, patent infringement, Katten law firm
Associate

Carolyn M. Passen concentrates her practice in the area of intellectual property litigation and counseling. She has represented clients in a variety of complex intellectual property disputes involving claims of copyright, trademark and patent infringement, trade secret misappropriation, false advertising and unfair competition in courts throughout the country. Carolyn has also represented clients in proceedings before the US Patent and Trademark Office Trademark Trial and Appeal Board and before the US International Trade Commission. She is experienced in trademark...

312-902-5377
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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