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FCA: Tell clients about post-Brexit changes to service

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The FCA has told firms to make clients aware of changes to products and services that will come about after Brexit.

Speaking at the Third UK Brexit summit, FCA international director Nausicaa Delfas said while the regulator is preparing for all the possible scenarios, they expect individual firms to do the same.

Delfas (pictured) says: “You know your businesses best, and you will be doing your own contingency planning.”

She says: “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.”

Delfas made a point firms should be communicating with customers “in a timely fashion” about any possible changes to its ability to provide services post Brexit, and if any changes may affect the customer’s products or contracts.

She says: “We expect firms to let customers know if there will be any changes […] for example in relation to their rights and protection under FSCS and the Financial Ombudsman Service schemes or changing contractual terms.”

Delfas used her speech to reiterate the regulator is working to ensure minimum disruption in the case of a no-deal Brexit:

“We are preparing for a range of scenarios, including a so called ‘hard exit’. Of course, we are hopeful for a better outcome – we are strongly supportive of a transition or implementation period, and will do everything we can to support achieving this.”

The FCA says it is working to mitigate ‘cliff-edge’ risks by getting a high level of equivalence with EU regulation.

“Of course, there is a broader solution to removing cliff-edge risks which is for both the UK and EU to commit to taking reciprocal equivalence decisions on each other’s regimes, as early as possible.

“Our work to onshore the EU rulebook, in the consultation I referenced earlier, demonstrates that on day one, the UK will have the most equivalent framework to the EU of any country in the world.

“We may be leaving the EU, but EU and UK financial markets will remain heavily interconnected and we need – and want – to continue to have close cooperation with our EU counterparts at European Securities and Markets Authority and at the National Competent Authorities.

In October the regulator published plans for a no-deal Brexit, with proposals to convert European law into British rules from next year.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. So on top of MiFID 11 and GDPR we are now expected to be experts on the outcomes and implications of Brexit legislation, at a time when not even the Government has a clue about what will happen.

    If the FCA are serious about protecting consumers let them work out the rules and give us direction, rather than suggesting that we take expensive legal advice, the cost of which will have to be borne by consumers, as with all other costly regulation. Yes, we will have high level regulation, but fewer and fewer consumers able to afford it.

  2. Nicholas Pleasure 5th November 2018 at 2:19 pm

    Why would we need legal advice? Unless we have dealings in the EU we will continue to be UK advisers dealing with UK clients with UK regulated investment schemes. The UK’s trading relationships with the EU will make no difference to our client arrangements, unless the FCA or someone else here can enlighten me.

    • My thoughts exactly. Add to that I remember Mervyn King when asked what he thought and how he would vote in the Brexit referendum said there wasn’t enough info to make an informed decision either way.

  3. Little bit of scare mongering me thinks.

    “UK-based firms that only do business in the UK may be affected less directly than others or not affected at all.
    However, firms which carry out business between the UK and the European Economic Area (EEA) – whether through a passport or directly under EU legislation – will be affected.”

    https://www.fca.org.uk/firms/preparing-for-brexit

  4. “We are expecting you to take your own legal advice on what a no-deal Brexit might mean for you”

    Spending other people’s money on what is probably a fruitless exercise.

    Can’t work out whether that makes them Brexiteers or Labour.

  5. I cannot believe that Ms Delfas has so little understanding and appreciation of what we actually do.

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