On October 10, 2018, the FCA published three press releases announcing how entities can register with it as a CRA, a trade repository or apply for temporary authorization as a DRSP in preparation for the U.K. leaving the EU without a deal. The press releases follow the draft legislation and explanatory guidance recently published by HM Treasury and the FCA's first consultation on onshoring the EU technical standards through changes to its rulebook.
For CRAs, the U.K. intends to establish a conversion regime (for U.K. CRAs and third-country CRAs currently registered or certified by ESMA) and a temporary registration regime (for newly established U.K. entities that are part of a group of CRAs with an existing ESMA registration before exit day). The FCA's CRA press release informs CRAs of how they can notify the FCA of their intention to use one of these regimes and provides an indicative timeline for the legislation and regime to be put into place.
The draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018, published by HM Treasury on October 5, 2018, will establish a similar conversion regime and temporary registration regime for trade repositories. The FCA's press release asks trade repositories to notify it if they intend to use one of these regimes and provides an indicative timeline. It also confirms that further draft legislation is expected in 2018 on trade repository requirements, supervision and enforcement as well as on the equivalence regime for third-country trade repositories.
The revised Markets in Financial Instruments Directive currently establishes the authorization and organizational requirements for, and rules concerning publication of transactions by, DRSPs. A DRSP established in an EEA member state may currently provide its services in the U.K. based on its home member state authorization. When the U.K. leaves the EU, this will no longer be the case and non-U.K. EEA DRSPs will need to apply to the FCA for authorization. A temporary authorization regime will allow EEA-authorized DRSPs to provide a data reporting service in the U.K. for a year after March 29, 2019. The FCA's press release requests that DRSPs that want to use the temporary authorization regime notify the FCA and ensure connectivity to the FCA's Market Data Processor (MDP) system, including providing information on how these can be accomplished.
The CRA press release is available at: https://www.fca.org.uk/news/statements/registering-credit-rating-agency, the trade repository release is available at: https://www.fca.org.uk/news/statements/registering-trade-repository and the DRSP release is available at: https://www.fca.org.uk/news/statements/temporary-authorisation-regime-data-reporting-services-providers-drsps.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.