101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 48 England to designate these FMIs. This legislation will also provide for a temporary regime that would enable certain non-UK FMIs to continue to benefit from UK protections currently provided for by the EU Settlement Finality Directive. Without EU action to designate UK FMIs, EU settlement finality protection for UK FMIs will cease to be in place. This will mean that EU customers will present higher risks to these FMIs and may no longer be able to access their services. Without action from the EU, when the UK leaves the EU, UK trading venues would no longer qualify as EU trading venues. This means that, under their national law, EEA firms may not be able to be members of UK venues. UK venues will also not be eligible venues for EEA firms to execute certain equity and derivatives trades. This may prevent EEA firms from being able to trade in certain derivatives, where there is no alternative venue available in the EU. This would reduce market liquidity in the UK and EU. EU market operators that currently passport into the UK do not have to be recognised by the FCA in order to have UK firms participate in their markets. However, EU market operators who undertake regulated activities in the UK should seek recognition as a Recognised Overseas Investment Exchange. In addition, UK-based firms may also no longer be able to undertake certain equity and derivatives trades on EEA trading venues. However, alternative UK and international venues exist, and would be available for UK market participants. The government intends to give the FCA powers to authorise and regulate both UK and non-UK Credit Rating Agencies (CRAs) and Trade Repositories (TRs) after exit. The government intends to grant powers to the FCA to allow UK CRAs and TRs to convert their existing EU authorisation into a UK authorisation, so UK customers of both UK CRAs and TRs that convert will not have to take any action. If no action is taken by the EU, EEA firms will no longer be able to access these UK firms. Unless the EU acts by endorsing or finding UK-based CRAs equivalent, the ratings of UK-based CRAs will no longer be able to be used in the EU for regulatory purposes when the UK exits the EU. The government is legislating to bring in a temporary regime in order to minimise the impact on UK customers of both EU CRAs and TRs. Further details of the regimes for TRs and CRAs are expected to be provided by HM Treasury in September 2018. Data sharing The government will publish a technical notice on transfers of personal data between the UK and the EU. Organisations that receive or transfer personal data between the UK and the EU (including financial institutions) should refer to this document for further information on preparing for the UK leaving the EU without a deal.