It is exactly 1 month until everything changes…. again.
It’s been a long slog through 2020, with heartache for many families, people putting themselves at risk on the front line to help others and yet more just trying to keep food on the table. Brexit was to be the big story of the year, but remarkably, the world had other plans.
Unfortunately, while in the middle of the health crisis, we are going to have to cope with yet more change and try to keep things together for our own staff and customers. New lockdown restrictions and the end of the transition period will not make it an easy start to 2021, so the financial services industry needs to ensure that people can continue to access their funds, borrow when they need to and safely save the rest. All with the least possible drama.
This is a very quick overview of recent Brexit topics affecting the financial services industry. More detailed support and information can be received from your regular FSTP contact or by clicking on the link here.
Temporary Transitional Power (TTP)
The Bank of England and the PRA has issued a statement regarding the TTP and how it intends to use these powers over the coming months.
HM Treasury have now confirmed that it is their intention to retain the TTP for a maximum of two years, after the end of the transition period. This allows the regulators to delay the application of, or modify, the regulatory obligations on firms where they have changed because of an onshoring amendment.
The Bank of England and the PRA, however, have indicated that they do not intend to use this extension for the full period and this will run out on 31 March 2022. Naturally, very little is as straightforward as it seems, and the statement does say there will be exceptions.
In July, the European Court of Justice (ECJ) declared the EU/US Privacy Shield transfer mechanism to be invalid, as it failed to provide for the basic data protection rights of EU citizens. This was known as the ‘Schrems II’ ruling. The previous Safe Harbour structure was invalidated in 2015 on similar grounds.
With the UK outside of the EU now, this can have serious implications for data transfer into and out of Europe.
The European Data Protection Board have now advised that firms need to consider whether tools such as the Standard Contractual Clauses (SSCs) are sufficient protection for clients where data is transferred out of Europe. The Information Commissioners Office is now looking at whether it will be necessary for them to issue its own guidance for cross border information transfer in the future.
As in all things Brexit, this is yet another curveball adding to the complexity of our daily lives, and one we need to keep on top of. (Sometimes you run out of metaphors for Brexit and must mix a few.)