EBA Reminds Firms to Execute Contingency Plans for Brexit Transition
EBA is reminding the impacted financial institutions to finalize the full execution of their contingency plans in accordance with the conditions agreed with the relevant competent authorities before the end of transition period on December 31, 2020. The UK financial institutions offering services to EU customers should ensure that they have obtained the necessary authorizations from EU competent authorities and effectively established themselves before the end of transition period; these institutions should also provide adequate information to their EU customers regarding the availability of services after the end of the transition period.
To continue to provide services in EU, the UK-based financial institutions need to finalize their authorizations from EU competent authorities and fully establish their EU-based operations in accordance with the conditions and establishment plans agreed with the relevant competent authorities. EBA is reminding financial institutions about the need to have clearly articulated and appropriate booking arrangements, to meet the outsourcing requirements as provided in the EBA guidelines on outsourcing arrangements and to not outsource activities to such an extent that they operate as empty shell companies (as also provided in the EBA opinion on preparations for the withdrawal of UK from EU). Despite significant action by many financial institutions as well as the steps taken by EU public authorities to address financial stability concerns, even the institutions that have already obtained all necessary authorizations and permissions should remain vigilant. In this regard, financial institutions are also reminded to complete the necessary actions regarding the re-papering of contracts with their EU clients.
Furthermore, EBA reiterates that eIDAS certificates issued to the UK-based account information service providers and payment initiation service providers should be revoked and no longer supported. Payment service providers should include additional details regarding the payer and the payee for the transfer of funds between EU and UK. EBA also reminds institutions to ensure adequate communication regarding their preparations and possible changes to any affected EU customers.
Related Link: Press Release
Keywords: Europe, EU, UK, Banking, PMI, Contingency Plans, Brexit Transition, EBA
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