UK companies are woefully unprepared for the next tranche of financial regulation from Brussels, coming into force in just two weeks, lawyers have warned.
Magic circle outfit Linklaters said this week there is a widespread sense that firms do not have enough information and aren’t taking the necessary steps to get ready for the new market abuse regulations, which set out rules to clamp down on insider trading and make the process of trading more transparent.
Just five per cent of company secretaries and compliance officers said they were totally prepared for the new EU regulations, which go live on 3 July. One-fifth said there was no way they would be fully compliant within the next two weeks.
“This is partly because there are a number of issues regarding how the rules should work in practice which remain unresolved, and partly because not all of the final rules and guidance have been published,” Linklaters said.
The rules are an extension to ones already in place, though Linklaters said there were some crucial changes, particularly for AIM-listed firms which may not be used to complying with the stricter elements of the regulations.
Whatever the outcome of today’s referendum, firms will almost certainly still need to comply with the rules, which originate from the EU, since the UK will not immediately exit the European Union if it votes to Leave given that it has at least two years to negotiate the terms of a departure.