FCA urges firms to prepare for Brexit

FCA urges firms to prepare for Brexit

The Financial Conduct Authority has reminded firms they need to make sure they are prepared for Britain's departure from the European Union, regardless of the outcome of the negotiations.

The regulator's executive director of international, Nausicaa Delfas, has reiterated the FCA is preparing for all Brexit scenarios and it expects firms to do the same.

She said: "You know your businesses best, and you will be doing your own contingency planning. In our discussions and communications with firms, we have been reiterating this point and making sure that firms are taking steps to ensure they are prepared, whatever the outcome.

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"We are expecting you to take your own legal advice on what a no-deal Brexit might mean for you, and, of course, for your customers, and any steps you may need to take to manage this.

"In terms of your customers, firms should understand the impact of Brexit on them, continue to service them fully and fairly, and communicate with them in a timely fashion. We expect firms to let customers know if there will be any change to your ability to provide services to them post-Brexit, and if any changes may affect the customer’s products or contracts."

Ms Delfas said an example of something firms might need to tell their clients about could be changes to their rights and protections under the Financial Ombudsman Service and the Financial Services Compensation Scheme.

Last month the FCA published plans for a hard Brexit, that is Britain leaving the EU without a deal, with proposals to convert European law into British rules from next year.

This means recent European rule changes such as Mifid II and the General Data Protection Regulation will both become part of British law.

Ms Delfas said the FCA was "determined" to continue the UK's history of promoting free trade and open markets.

She said: "This is not for competitiveness sake. Open financial markets help to diversify risk, increase efficiency and reduce fragility in the financial system, and help our companies access deeper pools of capital.

"While Brexit will bring changes to how we engage with the EU27, our globalised financial markets will remain open for business.

"We have been clear that we do not see leaving the EU as an opportunity to join a race to the bottom in regulatory standards – in fact, it’s quite the contrary. We know that you and your consumers need high quality, predictable, stable regulation to thrive and support the needs of your customers.

"We will work with our global counterparts to develop and implement standards which are strong but flexible enough to enable competition and innovation."