The Bank and PRA welcome the written ministerial statement made on Wednesday 25 March 2020 by HM Treasury outlining their intention to retain the regulators’ temporary transitional power (TTP), which was introduced through the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019, and shift its application so that it is available for use by the UK financial services regulators for a period of two years from the end of the transition period.
The Bank and PRA intend to use the TTP after the transition period as previously communicated in relation to exit day. This means that, in all but a few areas, PRA-regulated firms and Bank-regulated FMIs do not need to have completed preparations to implement changes in UK law arising from the end of the transition period by December 2020.
We intend to grant general transitional relief on a broad basis, with key exceptions as previously identified, for a period of 15 months after the end of the transition period (ie ending on Thursday 31 March 2022).
Specific uses of the TTP, in particular those relating to some of the new requirements on firms entering the temporary permission regime, are expected to remain as previously published.
Application of the TTP to changes to new EU material due to become applicable during the transition period will be considered as part of the ongoing legislative process in relation to those provisions.
The draft transitional directions and guidance, the most recent of which were published in July 2019 as part of CP18/19 'UK withdrawal from the EU: Changes following extension of Article 50', will be updated in light of the transition period and more details will be published in in due course.
The FCA have also made a statement about their intended use of the temporary transitional power at the end of the transition period.