FCA Brexit consultation offers alternative to noisy political debate

You might be excused for thinking that given the remaining Brexit uncertainty, contingency planning is something for policy wonks and lawyers. But this oversimplifies the situation, in particular since the FCA published two consultations on Brexit last week offering an unsentimental and technical analysis. The regulator provides some detailed guidance on selected issues where IT changes are needed irrespective of the type of Brexit. CP18/28 covers large parts of the rulebook changes and Binding Technical Standards (the UK equivalent of EU Regulatory Technical Standards) while CP18/29 deals with the necessary temporary permission regime during the transition.

CP18/28 is rather long with 781 pages, owing to formality. The FCA copies large chunks of EU rules and uses “find and replace” on all EU references. But hidden in the document are some interesting points. For example, the FCA will publish its own list of instrument reference data, which among others will determine a new scope for transaction reporting. Also on reporting, UK branches of EU27 investment firms need to start reporting to the FCA directly, something they just stopped doing with the introduction of MiFID II. And finally, the FCA points out that UK trading venues have to start transaction reporting on behalf of their EU27 members, something that wasn’t necessary before.

So, while the political debate is very noisy, these technical consultations will help the City to focus on the right preparations for whatever the outcome will be.

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