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#1 31-07-2020 20:32:00

johnedward
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ESMA urges brokers to prepare for the end of the Brexit transition

ESMA urges brokers to prepare for the end of the Brexit transition period


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The ESMA (European Security and Market Authority) called on brokers to finalise preparations and implement appropriate plans before the end of the UK's transition period which is the end of this year.

ESMA also confirms that the Memorandum of Understanding on cooperation and the exchange of information concluded with the UK Financial Services Authority (FCA) remain valid and will enter into force at the end of the transition period.

According to the regulatory authority, by the first day of next year, once the transitional period is over, brokers whose activities may be affected should have fully implemented their preparatory measures to mitigate any risks arising from the end of the transitional period. All entities should also have provided appropriate info to their traders on the possible consequences, the ESMA adds.

The regulatory authority notes that previously published statements on Brexit, in particular ESMA's general advice to support supervisory convergence in the context of the UK's withdrawal from Europe, issued on 31 May 2017, and the sector opinions issued shortly thereafter remain relevant and should continue to be followed.

"ESMA will continue to review its statements on Brexit, in particular with regard to operational issues, and will provide more timely communication", says the regulator.

Preparing Brexit without agreement

On 1 February last year, the ESMA and the EU's national securities regulators announced the conclusion of a Memorandum of Understanding (MoU) with the UK's Financial Services Authority (FCA) to cover cooperation and the exchange of information in the event that the UK leaves the EU without a withdrawal agreement. On 31 January 2020 at midnight (CET), the opt-out agreement entered into force and the UK began a transition period. As EU law continues to apply to the UK, these MoUs did not need to take effect.

ESMA, the EU national securities regulators and the FCA confirm that these MoUs, concluded last year, remain relevant and appropriate to ensure continued good cooperation and exchange of information and that they will enter into force at the end of the transition period, which ESMA stated is due to end at the end of this year.

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