The news around Brexit now comes out on an hourly basis (for example see here on Sky News). A “no deal” Brexit remains very possible. As a result, following last week’s announcements (see here), the UK’s Financial Conduct Authority (FCA) has made several of their own, in particular around EMIR and MiFID II:
The FCA has made this announcement in relation to EMIR in a no deal scenario. There are some parts that will be of interest to those in energy and commodities with UK entities:
- Reporting of new and outstanding trades – new in scope trades entered into by UK entities need to be reported from 1st April. Outstanding trades are required to be migrated by the Trade repository, but it is recommended that entities check that this takes place.
- Suspension of reporting requirements – The transposing Statutory Instrument has a provision for the suspension of the UK EMIR reporting requirement in the event that there is no approved TR. However, the FCA do not foresee this happening. As a result, under the no deal scenario, entities may wish to assume that reporting will be required from day 1.
- REFIT – There is an intention announced to also implement the upcoming REFIT proposals (see here) in the UK “as they are implemented in the EU.
Following last week’s ESMA statement, the FCA has issued this one. There is a statement that positions on EU venues will not be considered Economically Equivalent OTC with respect to position limits, and also, a confirmation that for now no post trade transparency requirements will apply for now.
Votes in the UK Parliament over the next two days may well give some indication of if and when a “no deal” scenario will apply. However, this is far from guaranteed.