The UK's Financial Conduct Authority intends to extend the proposed duration of the 'directions issued under the temporary transitional power' to 31 December 2020. This is to accommodate the UK's decision in March to put off its nominal date of departure from the EU until 31 October.

Other than the additional time, the FCA’s approach remains unchanged.

The "temporary transitional power" is something that temporarily empowers British regulators to make transitional provisions if the UK leaves the EU without a withdrawal agreement. It is intended to minimise disruption for firms and other regulated entities if the UK leaves the EU without a withdrawal agreement. When it is being wielded, firms do not generally need to prepare now to meet the changes to their British regulatory obligations that are connected to Brexit.

The extension should give firms and other regulated persons the time they need to phase in any regulatory changes they may need to make as a result of 'onshored' EU legislation. The power will ensure continuity and reduce the risk of disruption.

As the FCA announced in February 2019, there are specific areas where it will not be granting transitional relief and, in these areas, it continues to expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by D-Day.

The following firms or persons should continue their preparations to comply with the changes:

• Firms subject to the MiFID II (second Markets in Financial Instruments Directive) transaction reporting regime, and connected persons (for example approved reporting mechanisms).
• Firms subject to reporting obligations under the European Market Infrastructure Regulation (EMIR).
• European Economic Area issuers that have securities traded or admitted to trading on markets in the UK.
• Investment firms subject to the Bank Recovery and Resolution Directive (BRRD) that have liabilities governed by the law of an EEA state.
• EEA firms intending to use the market-making exemption under the Short Selling Regulation.
• Firms intending to use credit ratings issued or endorsed by FCA-registered credit ratings agencies after exit day.
• UK originators, sponsors, or securitisation special purpose entities (SSPEs) of securitisations they wish to be considered simple, transparent, and standardised (STS) under the Securitisation Regulation.

The FCA expects firms to use the additional time between now and the end of October to prepare to meet these obligations. If firms are not ready to meet these obligations in full, it will expect to see evidence of why this was not possible.