Information for financial undertakings

The Government’s information page on a no-deal Brexit specifically addresses financial services and the impact on these services if the Brexit occurs without a deal. In addition to the information contained there, the FSA wants to make the following information available to financial undertakings:

The FSA collaborates with European Supervisory Authorities (ESAs), i.e. the European Banking Authority (EBA), the European Insurance and Pension Funds Authority (EIOPA) and the European Securities Markets Agency (ESMA), in collecting information and analysing the risks to consumers in connection with the UK leaving the EU. The ESAs have already published information on their websites concerning financial companies with the intent to assist these companies in preparing for the UK leaving the EU. Below is the most important information regarding communication and business with consumers in each market.

EBA: financial institutions

  • In June 2018, the EBA published its opinion on how companies should prepare for the UK exit.
  • In December 2018, the EBA called for further action from companies affected by the UK leaving the EU to clearly inform their clients about the state of affairs. The companies should bring attention to risk factors that may affect customers and provide information on measures taken to prevent the business relationship from changing.

Further information on the issue can be found here.

EIOPA: the insurance and pension market

  • In December 2017, EIOPA published the Authority’s opinion on how to ensure service continuity for insurance companies in connection with the UK’s withdrawal from the EU. In the Opinion, insurance companies are urged to make sufficient preparation to ensure continued cross-border insurance services between the UK and other EEA States following the UK leaving the EU.
  • In November 2018, EIOPA called for further action to ensure service continuity in cross-border insurance. It states that insurance companies from the UK and Gibraltar should inform policyholders about any implemented contingency measures and the impact of those measures on their insurance contracts and services.
  • In February 2019, EIOPA issued Recommendations for the insurance sector in light of the UK’s withdrawal the EU. The objective of the Recommendations is to ensure convergence and consistent supervisory approaches in the treatment of UK insurance companies and distributors. The FSA will follow the above EIOPA Recommendations concerning possible issues that may arise from the UK’s withdrawal from the EU.

ESMA: the securities market

  • On 19 December 2018, ESMA issued a reminder to companies that they should provide their clients with detailed information on the impact of the UK withdrawing from the EU on the provision of services and investor rights.

Impact on authorisations

If the UK withdraws from the EU without an agreement, UK companies will no longer be able to operate in other EEA States, including Iceland, on the basis of an authorisation granted in the UK and reports from there to supervisors in the Member States. Therefore, UK companies will have to apply for authorisation in each state concerned if they intend to continue operations within the EEA. This will affect the activities of these companies in Iceland, but the effect will vary according to the nature of the business.

UK’s Financial Conduct Authority (FCA) and the Bank of England have put in place arrangements called: “Temporary Permissions Regime”. This regime permits financial market entities within the EEA to engage in interim operations subject to certain conditions. The deadline for entities regulated by the Bank of England has expired but the deadline for entities regulated by the FCA has been extended to 30 October 2019. Entities who wish to participate in the regime need to register with the FCA and declare that they intend to apply for authorisation in the UK. In this way, the activities of the companies in the UK will not be interrupted until their application for authorisation has been processed. The FSA does not facilitate the above registration but wishes to be made aware of it. Below is further information about the above regime:

In addition, the UK Government has issued guidance for EEA financial services companies providing services in the UK.

If Icelandic companies in the financial market intend to start operations in the UK after the withdrawal from the EU, this will only be done by applying for UK authorisation. The FSA should be informed of such intentions, but the Authority will no longer be acting as an intermediary to UK supervisors concerning such activities.

The FSA has sent circulars to Icelandic regulated entities informing them of the above.

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