The UK Financial Conduct Authority and ASIC have agreed on two Memoranda of Understanding to ensure there is continuity once the UK leaves the European Union.
The MoUs cover trade repositories and alternative investment funds (AIFs).
In a statement, ASIC said these agreements will provide reassurance by ensuring arrangements are in place for cross-border cooperation between the FCA and ASIC. The FCA and ASIC also support the continuity of existing equivalence decisions to provide certainty to businesses post-Brexit.
“The FCA and ASIC have always had a strong relationship, which will continue after Brexit,” FCA chief executive Andrew Bailey said.
“The MoUs we have agreed [on] today will ensure the FCA and ASIC have uninterrupted exchange of information and can supervise cross-border activity of firms. They provide a strong signal to the markets that the UK will continue to play an important role after Brexit. The MoUs will also provide much-needed assurance to our regulated stakeholders.
“We also support the continuity of existing equivalence decisions which will minimise disruption for firms in the UK and Australia.”
James Shipton, Chair, ASIC said the regulator is pleased to have cooperation arrangements in place with the FCA on trade repositories and alternative investment funds.
While the FCA and ASIC have always maintained a very close relationship on supervisory and enforcement matters, Mr Shipton said these two MOUs will enhance cooperation and information sharing between the authorities.
“Our commitment to ensuring the continuity of equivalence decisions will provide certainty to businesses and consumers and contribute to a fair, strong and efficient financial system,” he said.
“These MoUs will enter into force on the date EU legislation ceases to have direct effect in the UK. This will occur when the UK leaves the EU, or at the end of the transition period if a Withdrawal Agreement is in place.”
MoU on trade repositories
A new MoU on trade repositories is required because the FCA will acquire functions and supervisory powers in relation to trade repositories, which are currently supervised at the European level by the European Securities and Markets Authority (ESMA).
The MoU on trade repositories will ensure that ASIC can continue to access data on derivatives contracts held in UK trade repositories, where the information is needed for ASIC to fulfil its responsibilities and mandates. The MoU is established under Article 76(2) of the UK’s onshore European Market Infrastructure Regulation (UK EMIR). This provision aims at ensuring that third-country authorities such as ASIC, that do not have any trade repository in their jurisdiction, may access the information on derivatives contracts held in the UK trade repositories which is relevant for their mandates.
MoU on AIFs
The MoU on AIFs has been updated to reflect the regulatory regime that will apply in relation to AIFs in the UK post-Brexit. The MoU on AIFs provides a framework for the FCA and ASIC to work together to ensure alternative investment fund managers (AIFMs) and AIFs that operate on a cross-border basis are properly supervised in the UK and Australia. The MoU will cover Australian managers that manage or market AIFs in the UK and UK managers that manage or market AIFs in Australia, as well as their delegates and depositaries. The existence of an MoU between ASIC and the FCA is a precondition of the UK’s AIFM regime for allowing managers from third countries access to the UK market.
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