On February 1, 2019 the Financial Conduct Authority (FCA) announced that it has agreed Memoranda of Understanding (MoUs) with the European Securities and Markets Authority (ESMA) and EU and EEA National Competent Authorities (NCAs). These MoUs cover cooperation and exchange of information in case the UK leaves the EU on March 29, 2019 without a withdrawal agreement in place.
These MoUs include:
- A multilateral MoU with NCAs with regard to supervisory cooperation, enforcement and information exchange; and
- An MoU with ESMA with regard to supervision of Credit Rating Agencies and Trade Repositories.
The agreement on a multilateral MoU on supervisory cooperation, enforcement and information exchange between the FCA and the EU NCAs is particularly important for the investment management sector. The existence of such an MoU will continue to allow EU AIFMs and UCITS management companies to delegate their portfolio and risk management functions to UK-based investment firms and managers, if these meet all other applicable requirements, should the UK leave the EU without a withdrawal agreement in place.
Andrew Bailey, Chief Executive of the FCA, welcomed the agreement on the MoUs and stated that these should “minimize the potential for disruption, which we know is particularly important for the investment management sector, Credit Rating Agencies and Trade Repositories”.
ESMA also made a similar announcement which can be found here.