The FCA has released two consultation papers with its proposals for a smooth transition from the European Union in the event of a hard Brexit.
The papers focus on the temporary permissions regime, which allows the continuation of European firms and funds passporting into the UK for a limited period after 29 March, and amendments to the FCA Handbook around its responsibilities.
Regarding the temporary permissions regime, the regulator says it aims to “preserve existing arrangements” as far as possible for financial firms and consumers.
So far, the FCA has been responsible for shifting European rules into UK legislation to ensure regulatory systems are aligned from the first day outside the EU.
The watchdog says it will now take a proportionate approach and step up powers recently granted to it by the Treasury to “waive or modify” requirements to allow for a smooth transition.
In feedback, the regulator says it is looking to determine specifically whether or not compliance with changes to regulatory requirements by 29 March would be too challenging for firms.
FCA executive director of international Nausicaa Delfas says: “The FCA is planning to be ready for a range of scenarios. This is consistent with our aim to provide certainty and confidence for firms operating in the UK.”
The FCA says firms may also be requires to join additional schemes including the Financial Services Compensation Scheme to ensure consumers are pre-protected.
The watchdog confirms no broader policy changes are being proposed in the consultation papers however, which will be open until 7 December.
Delfas says: “We welcome engagement from across the sector, as we continue with our preparations for Brexit.”