Coronavirus and the US election trauma has been dominating the news recently, with lockdowns, votes and violence leading the front pages (and the back and business pages too).
Brexit plans and notifications continue to be issued and can’t get lost in all the noise. The FCA has issued a couple of documents that deserve some attention- The Policy Statement on the replacement for eIDAS certificates and an indication of its approach to Share Trading Obligations (STO) in the new year.
This Brexit Countdown is even more filled with acronyms and initialisms (I had to look that up) than usual. Remember that support is available on these topics, and other regulatory concerns, through your usual FSTP contact or by contacting us here.
The FCA’s PS20/13 was issued on 3rd November and affects the handling of UK eIDAS (electronic Identification and Trust Services) certificates, which will be revoked at the end of the transition period. This means that UK based Third-Party Providers (TPPs) will have to produce some other form of strong identification to UK account providers when initiating payments or accessing customer account information across the EU.
As eIDAS is the only accepted standard by the European Banking Authority for interaction between providers of open banking services, this poses a bit of a problem for TPPs in the very near future.
The new Policy Statement gives a bit of breathing space to everyone on this side of the channel by providing a transition period until the end of June 2021. How it will actually work is a different story. The FCA are requesting that UK based banks make changes to their systems allowing TPPs to provide a different certificate by the end of that time, without specifying how this will be issued, leaving it to industry to identify an independent body that can issue a new form of trusted certificate.
The Policy Statement is available here.
Share Trading Obligation (STO)
Making an assumption that mutual equivalence is not agreed by the end of the transition period, the FCA has published its approach on how firms can continue to meet their STO obligations and continue to trade shares across EU and UK trading venues.
It will continue to engage with market participants on the run-up to the end of the year to develop new rules, but the use of the Temporary Transitional Power (TTP) by the FCA in this area gives assurance that business can continue until the development of a more permanent solution.
In the meantime, the FCA is reminding EU Market operators that they need to ensure they have the right permissions in place to operate in the UK in 2021.