Brexit and the UK Financial Conduct Authority
On 7 April 2020, the UK Financial Conduct Authority (FCA) published its Business Plan for 2020/21.
Whilst much of the business plan focuses on the immediate priorities posed by the coronavirus emergency, the plan also highlights the consequences of Brexit and the need to work towards an effective post-transition period regulatory regime that will enable the UK to retain its pivotal role as a global financial centre.
Under the overall heading of "Cross-cutting work", the business plan addresses the FCA's "EU withdrawal and wider international work" and the FCA's intent in that regard to continue to work closely with European and global stakeholders on developing "robust global financial standards and effective supervision". In conclusion, under this section, the Business Plan states in reference to the FCA:-
"We will provide the [UK] Government with technical support as it negotiates the UK's future relationship with the EU and other jurisdictions. We will take steps to ensure that both we and the UK financial services industry are prepared for the end of the transition period. This includes preparing transitional measures, such as the temporary permissions regime for EEA-based firms and funds passporting into the UK."
The FCA has identified a specific budgetary requirement of £15 million out of a total Annual Funding Requirement for 2020./21 of £587.6 million with a view to ensuring that both the FCA and the UK Financial Services Industry are prepared for the end of the transition period currently due to occur on 31st December 2020. This £15 million figure is an increase of £10 million on the FCA's stated budget for EU withdrawal in its Business Plan for the previous year 2019/20 and , therefore, whilst not perhaps a large chunk of the overall budget, it is quite a significant commitment in itself in challenging times.
The Financial Services Sector continues to be one of the major areas of UK concern in developing the new UK-EU relationship and the FCA, working together with other UK regulators such as the Bank of England and the Prudential Regulatory Authority, is clearly keen to play its part in ensuring a smooth transition to the future.
