On 19 March 2021, the FCA announced it was extending the temporary measures in relation to the requirement for firms to issue 10% depreciation notifications to investors, which were put in place for the past 12 months in response to market volatility as a result of the Covid-19 crisis and Brexit transitional period. The FCA expects to consult on changes to the requirement in the spring and therefore extends the temporary measures until the end of 2021, while it undertakes this policy work.
The FCA also announced that it will not take action against firms who do not produce RTS 27 reports for the rest of 2021. The next set of RTS 27 reports on execution quality will be based on pre-Brexit data. As a result, the information in them is likely to be of limited use for market participants and may even be misleading. The FCA explains that there is also a particular challenge arising from the European Union’s two-year suspension of RTS 27 reports for firms in the Temporary Permissions Regime who, benefitting from substituted compliance, would normally discharge their obligation in the UK by producing reports for the firm as a whole. The FCA is preparing a consultation on this obligation, with a view to abolishing it, which it expects to conclude by end of 2021.
