Firms based in the European Economic Area (EEA) that currently passport into the UK can now notify the FCA that they intend to seek full regulatory authorisation, enabling them to continue new and existing regulated business for a limited period in the event the UK crashes out of the EU.
From 7 January 2019, firms can notify the FCA that they wish to enter the temporary permissions regime using its Connect system.
They will have until 28 March 2019 to do so.
There is no fee associated with the process and the UK watchdog recommends that “firms and fund managers should not wait for confirmation of whether there will be an implementation period before they submit their notification”.
Firms that do not submit a notification will be unable to use the regime, the FCA confirmed.
Good call
The initiative was first announced in December 2017 but was thought to have been superseded by an agreement between the EU27 and the UK on the terms of a transition period following the UK’s exit.
However, the FCA pushed ahead with its temporary permissions regime, treating it as a backstop in case the implementation regime “abruptly falls away”.
Given the current uncertainly, that decision seems wise.
One exception
The temporary regime will also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK
Funds opting not to take advantage of the regime will be unable to continue marketing that fund in the UK on the same basis they did before exit day.
“The only exception to this is for new sub-funds of EEA Ucits that are in the temporary permissions marketing regime on exit day. It is possible for such new sub-funds to enter the temporary permissions marketing regime after exit day.”
Details of firms and investment funds with temporary permission will be available on the Financial Services Register.
