Over 1,000 EU firms and fund managers have decided to enter Temporary Permissions Regime, FCA exec says
Nausicaa Delfas, Executive Director of International at the FCA, updates on preparations for Brexit.
More than 1,000 EU firms and fund managers have already decided to enter the UK Temporary Permissions Regime (TPR) and seek to continue to do business in the UK after Brexit, Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority (FCA) said in a speech today.
Ms Delfas noted that the FCA continues to prepare for all scenarios, including the so-called “hard Brexit”. She stressed that, in case the UK leaves the EU without a deal, passporting will end.
To prepare for this, the FCA together with the Treasury and the Bank of England, has introduced new regimes such as the Temporary Permissions Regime and the Financial Services Contracts Regime (FSCR).
The Temporary Permissions Regime will allow EU firms and funds that currently passport into the UK to continue operating in the UK in case of “hard Brexit”, and end of passporting. EU firms will temporarily be able to continue to operate within the scope of their current permissions and EU funds will be able to continue marketing into the UK.
Firms will need to notify the FCA that they wish to use the regime using the Connect system. Notifications must be submitted by the end of March 28, 2019, just a week away.
Firms which have not notified the FCA that they wish to enter the Temporary Permissions Regime but need UK permission to perform their existing contracts, will automatically fall within the FSCR regime. This will allow firms that have pre-existing contracts in the UK to wind down their business in an orderly fashion. However, there are limits to the FSCR regime, for example EEA established fund managers, depositories and trustees will not be able to manage or provide depositary services to UK authorised funds, unless they enter the Temporary Permissions Regime.
After the notification window closes, the FCA will inform the firms of when they will have to submit their application for authorisation – their ‘landing slots’. The regulator says it will ensure that firms and funds have enough time to prepare their applications. The FCA expects the first landing slots to be October to December 2019 and the last to be January to March 2021.
Sadly enough, at the moment, there is no similar system for UK firms who passport into the EU. Several EU Member States have put arrangements in place similar but not identical to the TPR arrangements. These include jurisdictions important to UK firms, such as Germany, Spain, France, Ireland, Italy, Luxembourg and the Netherlands.