FCA – Brexit – Onshoring and the Temporary Transitional Power

The FCA expects firms and other regulated persons to be compliant with changed obligations now that the transition period has ended:

  • MIFID II transaction reporting requirements
  • EMIR reporting obligations
  • SFTR reporting obligations
  • Certain requirements under MAR
  • Issuer rules
  • Contractual recognition of bail-in
  • Client Assets Specialist Sourcebook rules (CASS)
  • Market-making exemption under the Short Selling Regulation
  • Use of credit ratings for regulatory purposes
  • Securitisation
  • Electronic commerce EEA firms
  • Mortgage lending after the transition period against land in the EEA
  • Payment Services – strong customer authentication and secure communication

For more detail, see our key requirements of firms. Firms should read our TTP directions, annexes and explanatory note for more detail. Below we also set out our expectations.

https://www.fca.org.uk/brexit/onshoring-temporary-transitional-power-ttp

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Banka Transilvania impales Bonds with MiFIR Systematic Internaliser MIC

  • Last ESMA update: 23/02/2021
  • MIC ID: BTRL
  • LEI: 549300RG3H390KEL8896
  • Entity Name: BANKA TRANSILVANIA S.A.
  • Service Name: BOND (Bonds)

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MiFIR – waivers and deferrals for non-equity instruments per MIC

ESMA has provided analysis of the application of the deferral regime on-venue – per MIC

For non-equity instruments, 23 jurisdictions provided information on the application of deferral regimes by trading venues. ESMA retrieved data from 108 operating MICs, which in total provided an overview of 222 segment MICs.

https://www.esma.europa.eu/sites/default/files/library/esma70-156-3926_annual_report_2020_non-equity_waivers_and_deferrals.pdf

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ICMA – Implications of UK withdrawal from the EU

Following the UK’s withdrawal from the EU and the subsequent end of the transition period on 31 December 2020, passporting rights have ceased and the EU Single Market has become two separate markets.

Post-Brexit EU-UK financial services are negotiated largely outside the Trade and Cooperation Agreement, agreed by both jurisdictions on 31 December 2020.

The British Government announced in November 2020 a package of equivalence decisions under which EU and EEA firms are equivalent for the purposes of regulation in the UK, together with guidance on the UK’s approach to equivalence in future.

UK financial services regulation is expected to diverge from the EU regulation as a result of reviews of the future of the UK financial services and its regulatory framework. This includes a Treasury Committee inquiry on the future of financial services and the HM Treasury’s review of the Future Regulatory Framework (FRF).

The EU’s approach to cross-border financial services with the UK and other third countries is to decide whether or not to grant regulatory equivalence. There are provisions for equivalence in some (eg central clearing counterparties) but not all EU financial services regulations. Furthermore, certain financial services aspects are now governed by several Memoranda of Understanding (MoUs) between the FCA and European authorities.

https://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/brexit-implications-for-icma-members-of-the-uk-vote-to-leave-the-eu/

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MiFID reporting after the Brexit transition period – FCA

Go-live of the onshored MiFID regime

Given that the transition period ended on 31 December 2020, the European Securities & Markets authority (ESMA) switched off the FCA’s access to its MIFID systems.

Two key systems are ESMA FIRDS, which provides reference data for all MiFID instruments that are Traded on a Trading Venue (TOTV) in the EU, and ESMA FITRS, which publishes reference data, liquidity, waiver thresholds and quantitative data to help firms assess their trade reporting and tick size obligations.

To provide operational continuity to UK firms, the FCA has built equivalent FCA systems in the UK, called FCA FIRDS and FCA FITRS. Both of these systems are available to firms for connectivity and output in testing (the parallel run).

https://www.fca.org.uk/markets/regulation-markets-financial-instruments/mifid-reporting-after-brexit-transition-period

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