Polish FSA about brexit in the financial market context
In accordance with the speech agreement between the UK and the EU, the transitional period starts on January 31, 2020, i.e. from the moment of brexit, until December 31, 2020. At the time, the United Kingdom is treated as a Member State even though it is no longer represented in the EU institutions and is not involved in the decision-making process.
During the transition period, British providers of services in the EU financial market, including Poland, are operating under the existing rules and enjoy the Treaty freedoms of the internal market. At the end of 2020, there will be a change, as the UK has not applied for an extension of the so-called „free fall”. the transitional period, as provided for in the agreement. Thus, from 2021, British (and Gibraltar) service providers will automatically become third country entities in Poland (and in other EU countries) and, as such, will only be able to operate in Poland once they have undergone an appropriate procedure before the FSA – e. g. after authorisation. The PFSA will supervise such entities to the extent required by law.
FSA draws attention to possible differences in regulations and standards of protection of statutorily protected secrets, data processing or outsourcing, which may become visible as a result of brexit.
The possible conclusion of the Partnership Agreement currently being negotiated between the EU and the UK will certainly not extend the status quo, i. e. will not automatically extend the activities of UK entities in the EU under the existing rules (e. g. Passportation of services) and will not mean that it is not necessary to apply for the relevant permits. British financial operators should therefore complete their adaptation to the new legal environment by the end of 2020 or discontinue their activities in Poland (and in the EU).
Polish FSA recalls that customers have the right to request information from entities on the effects of brexit and the end of the transitional period, the actions taken by the entity and the presentation of their contractual and statutory rights. Polish FSA expects the supervised entities to take concrete steps to inform current and potential customers in a reliable manner about the risks associated with brexit and to provide contact details in case of further questions.
Polish FSA also warns against attempts to defraud data, disinformation and unreliable offers of services, the occurrence of which will increase due to the passing of the transition period. In case of suspicious activity, it is recommended to contact directly the entity with which the client has signed or intended to sign a contract and verify the event.
Polish FSA also encourages financial market participants to keep track of the European Commission’s and the European System of Financial Supervisors’ (ESMA, EBA, EIOPA) websites reporting on brexit.