29 Dec Prepare your Firm for End-of-Year Brexit Transition Period
Remember the UK left the European Union on 31st January 2020? The country, since then, has been into a Brexit transition period. The transition period ends on 31st December 2020. So what preparations your firm must have been completed during this time? What plans does the FCA (Financial Conduct Authority) talk about?
If you take a look at the ‘Preparation for Brexit’ webpage on FCA, the website talk about the following things that might affect businesses
- Issues for all forms
- Passport Changes
- Legislation in the UK Changes
- Temporary transitional power (TTP)
- Users of credit ratings
- Data sharing
- Communicating with customers
- Considerations for UK firms
- Considerations for EEA firms conducting business in the UK
Let’s gather some details on all these points, and you can access what impact might these have on your firm before the Brexit transition period ends:
Issues of all Forms
FCA wants all the firms to have a realistic approach to the consequences of Brexit. The most impactful consequence anticipated was that EU and UK government might end up with a free trade agreement. This meant businesses had to pay excise and duty tax. But thankfully, a free trade agreement has been reached at the end of the Brexit transition period.
Apart from other major changes, businesses within European Economic Area need to deal with passport changes as well. Passporting between EU and UK will end at the end of this transition period. This affects both, firms and funds based in UK, and firms and funds based in EU.
Of course, if your business deals occur particularly in UK, but you must worry if your business covers all of the EU. All these businesses can take the Temporary Permission Regime (TRR). TPR comes in affect after 31st December 2020. This is more like temporary permission on the passports of UK and EU residents to carry out a trade or other business activities for a limited period of time, until things are sorted out.
What are the Changes Made in UK Legislation?
European Union Withdrawl Act 2018 will get converted into existing EU legislation. This directly affects the UK laws, and preserves existing laws that are implemented as per the EU obligations. The EU Government has been given full control on the legislation. So that when the time comes, and they have to make sure that the legislation works out, all the necessary amendments make it work. To keep things consistent, the government that there are no changes in the law, but the same laws will apply even after the transition period.
What About Temporary Transitional Power?
To make sure the UK government adapts completely, UK financial regulators have given transitional powers to regulators. What does that mean? This gives them the power to make transitional provisions in financial service legislation. These temporary transitional powers will remain from the end of a transition period to March 2021.
Protection of Data
While transferring data between the UK and EU during the transition period, all the firms need to be extra careful about any loss of data. Extra care needs to be taken for the protection of data. We’re still not clear about the level of transfer that’s already taken place. The UK and EEA are still in the process of sharing stuff. Here are some things you need to consider for contingency planning:
- How much reliant is your stuff on transfers of personal data. This can be very important because of where your data is located.
- You need to be certain of any risks or any issues you might be facing down the road over the years.
How to Communicate with your Customers
Your customers will be most definitely affected by the transition period. They need to know what to plan for it and how to resolve problems. FCA’s handbook may come in handy for those looking for the right solutions.
We’re hoping you’ll get through this transition period safe and sound. With good news like free trade between the UK and EU, the entire process doesn’t look that tougher anymore. Happy transitioning!