4 March 2019
Brexit Update: March
Includes the Memorandum of Understanding between the Financial Conduct Authority (FCA) and the the Jersey Financial Services Commission (JFSC), an update relating to UK statutory instruments, ESMA update on no-deal preparations, and a speech from the Executive Director of International at the FCA
Brexit: European Council adopts decision extending the period under Article 50
On 22 March 2019, European Council (Article 50) adopted a decision formalising the political agreement reached on 21 March 2019 on extending the period under Article 50. In accordance with the treaties, the decision was taken in agreement with the United Kingdom. Under the decision, in the event that the withdrawal agreement is approved by the House of Commons by 29 March 2019 at the latest, the extension will be until 22 May 2019. In the event that the withdrawal agreement is not approved by the House of Commons by 29 March 2019, the extension will be until 12 April 2019. In that event, the UK will indicate a way forward before 12 April 2019, for consideration by the European Council. For the duration of the extension, the United Kingdom remains a member state with all the rights and obligations set out in the treaties and under EU law.
JFSC secures access for Jersey to UK funds market ahead of Brexit
On 11 March 2019, a Memorandum of Understanding (MoU) was signed between the Jersey Financial Services Commission (JFSC) and the UK’s Financial Conduct Authority (FCA). The MoU will ensure that Jersey’s investment funds industry will still be able to market its funds in the UK following Brexit.
EU Exit: UK statutory instruments
In the course of February 2019, the UK Government has continued to publish further final and draft statutory instruments (SIs) to make the changes to legislation required as part of Brexit, including in the event of a hard Brexit. Areas covered by some of the recent statutory instruments that have been published include:
• the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 (with explanatory memorandum);
• the Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (with explanatory memorandum), which was withdrawn from consideration; and
• the European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) Regulations 2019 which amend the definition of “exit day” in the European Union (Withdrawal) Act 2018 from 29 March 2019 to 22 May 2019, if the negotiated withdrawal agreement has been approved by the House of Commons by 29 March 2019, or to 12 April 2019, if the negotiated withdrawal agreement has not been approved.
An overview of HM Treasury’s list of financial services SIs made under the EU (Withdrawal) Act 2018 can be found here. A list of draft financial services SIs laid before Parliament and subject to the affirmative procedure is also available.
EU Exit: ESMA update on no-deal preparations
On 28 March 2019, European Securities and Markets Authority (ESMA) published a statement providing an update on its preparations for a no-deal Brexit scenario in view of recent developments on timing. ESMA highlights that, in relation to previously published measures and actions issued on the basis of a no-deal Brexit scenario on 29 March 2019, reference to the date of 29 March 2019 in these statements should now be read as 12 April 2019.
FCA speech: ‘Brexit and beyond’
On 21 March 2019, the FCA published a speech delivered by Nausicaa Delfas, Executive Director of International at the FCA, entitled ‘Brexit and beyond’. In her speech, Ms Delfas discusses the FCA’s preparations for exit, its expectations of firms, the implications of UK’s exit for consumers and the residual risks which remain. Ms Delfas also considers the FCA’s role in international engagement after the UK’s withdrawal from the EU.