ASIC ‘Well-Placed’ to Manage Impacts of No-Deal Brexit

ASIC says it is carefully monitoring developments and has been liaising closely with UK and Australian authorities to plan for potential Brexit-related impacts.

ASIC (the Australian Securities and Investments Commission) has issued a statement on its preparedness for UK’s scheduled departure from the EU on 29 March 2019.

“The terms of the UK’s exit remain subject to on-going negotiation between the UK and EU with a range of outcomes possible,” it said.

ASIC said it is “carefully monitoring” developments and has been liaising closely with the UK FCA (Financial Conduct Authority), the BOE (Bank of England), and other Australian financial authorities and regulated stakeholders to identify and plan for potential Brexit-related impacts, including for a ‘no deal’ scenario.

“ASIC is well placed to manage the impacts arising in a ‘no deal’ scenario,” said commissioner Sean Hughes. “We have been working closely with the UK’s financial regulators and our aim is to limit disruption to Australian financial services and our markets.”

ASIC said it will enter into new MoUs with the FCA on trade repositories and credit rating agencies, and will update the existing MoU on alternative investment funds. It will also update its information sharing arrangements with the BOE on clearing and settlement facilities.

“Existing equivalence decisions granted in respect of Australia by the European Commission (EC) before exit day, will generally be incorporated into UK law and will continue to apply to the UK’s regulatory and supervisory relationship with Australia, post-Brexit,” ASIC said.

However, it noted that the BOE has confirmed it will conduct an equivalence assessment of Australia’s regime for central counterparties. ASIC and the RBA (Reserve Bank of Australia) are working with the BOE on the equivalence assessment, the statement confirmed.

The three regulatory bodies are also working together to ensure business continuity for systemically important Australian firms operating in the UK, and the ASX Group is pursuing the UK temporary recognition for CCPs (central counterparties), which will allow it to continue providing clearing services in the UK.

“In view of the Brexit date of 29 March 2019, we expect firms to have adequate contingency measures to mitigate the potential implications of Brexit for their operations and importantly, to ensure they have in place appropriate AFS licensing arrangements to provide services in Australia,” said Hughes.

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