ASIC prepared for no deal Brexit

Financial regulators say they have plans to navigate a ‘no deal’ Brexit, but warn individual firms must have their licensing right.

Britain's Prime Minister Theresa May. Picture: AP

Hundreds of foreign financial services operating in Australia could find themselves in breach of their licences when Brexit goes through next month, the Australian Securities and Investments Commission has warned.

The corporate watchdog today noted that there were 298 British firms operating in Australia - including 285 UK foreign financial services operating under financial services licences exemptions - that could be affected by regulatory changes post-Brexit.

“In view of the Brexit date of 29 March 2019, we expect firms to have adequate contingency measures to mitigate the potential implications of Brexit for their operations and importantly, to ensure they have in place appropriate AFS licensing arrangements to provide services in Australia,” ASIC Commissioner Sean Hughes said

While ASIC and other regulators have been working to prepare for the UK’s withdrawal from the European Union, the efforts have been complicated by the ongoing uncertainty over the formal structure of the 29 March exit.

Mr Hughes said the watchdog’s contingency planning included a “no deal” scenario, under which the UK leaves without any agreements in place with the EU.

“ASIC is well placed to manage the impacts arising in a ‘no deal’ scenario,” Mr Hughes said.

“We have been working closely with the UK’s financial regulators and our aim is to limit disruption to Australian financial services and our markets.”

Mr Hughes said ASIC would also continue to monitor developments post-Brexit “as intended and unintended consequences become apparent”.

Australian companies with operations in the UK have also been assessing the potential effect of Brexit on their businesses, with Australian banks such as Commonwealth Bank and Westpac taking steps to relocate some of their UK-based functions to Europe.

ASIC said it was working with the Reserve Bank of Australia and the Bank of England to ensure business continuity for “systemically important” Australian firms operating in the UK.