FCA Updates Directions Under the Temporary Transitional Power
On September 26, the UK Financial Conduct Authority (FCA) published updated draft directions under its Temporary Transitional Power (TTP). The TTP is designed to give the FCA flexibility in applying post-Brexit requirements to firms that are transitioning to the new UK regulatory framework following the UK’s departure from the EU. The draft directions would only come into effect on exit day if the UK leaves the EU without an implementation period.
The draft directions are an update to directions previously issued on March 28. The FCA also updated its accompanying explanatory note providing guidance on the use of the TTP. The FCA states that the draft directions are being published now in order to give firms time to consider any changes that may apply to them prior to finalization.
The main updates relate to the following areas:
extending the proposed duration of the directions issued under the TTP from June 30, 2020 to December 31, 2020;
updating provisions relating to prudential requirements to reflect new HM Treasury legislation and FCA exit instruments published after March 29;
revoking certain directions in relation to payment services provided by European Economic Area (EEA) credit institutions, as these are no longer needed because of legislative amendments made by the UK Government; and
applying a standstill direction to allow EEA Central Banks and the European Central Bank to continue to rely on their status as exempt persons until December 31, 2020.
The FCA does not expect to make significant changes to the updated draft directions prior to exit day.
The updated draft directions and explanatory note are available here.