3rd Aug 2020
On 1 July 2020 the UK Financial Conduct Authority (“FCA”) announced that the notification window for the Temporary Permissions Regime (“TPR”) will re-open on 30 September 2020. Pursuant to the UK’s withdrawal from the EU, the TPR will come into force after the end of the transition period on 31 December 2020 and will allow any EEA financial services firms and funds that are currently passporting into the UK to continue to provide financial services with minimal disruption whilst seeking full UK authorisation. The extension of the notification regime will allow any financial services firms and any fund managers that have not yet notified the FCA of their intention to continue to provide financial services in the UK following the end of the transition period to do so. The FCA will be communicating further on the matter in September.
Financial services firms in any European Economic Area (EEA) member state can currently use the EU’s passporting regime to establish a presence or carry out permitted activities in any other member state. Investment funds can be marketed throughout the EEA as a result of similar passporting provisions.
The EU and the UK agreed that the transition period following the UK’s withdrawal from the EU would operate until the end of December 2020. During the transition period, EU law remains applicable in the UK in accordance with the UK’s overall withdrawal agreement and financial services firms and funds can continue to benefit from the passporting regime.
At the end of the transition period, EEA financial services firms will no longer be able to passport into the UK and would need to seek UK authorisation in order to continue to access the UK market. Similarly EEA funds would need to seek UK recognition in order to continue to market within the UK.
The TPR will instead allow financial services firms to continue to operate within the UK within the scope of their current permissions for a limited period, whilst they seek full UK authorisation under the post EU-withdrawal regime if necessary. It will also allow investment funds with a passport to continue temporarily marketing within the UK. The FCA has announced that the notification window under the TPR will re-open on 30 September 2020.
Under the TPR, any EEA firms that are currently passporting into the UK and have filed a relevant TPR notification with the FCA will be deemed to have a Financial Services and Markets Act 2000 (“FSMA”) Part 4A Permission reflecting the scope of their passporting permission immediately prior to the end of the transition period. The FCA expects that the TPR will be in place for a maximum of three years, during which time any financial services firms and funds will need to obtain authorisation or recognition in the UK in order to continue to provide financial services or market following the end of the TPR.
The FCA will provide additional information on the TPR in September. If you have any questions or comments in relation to the TPR, the investment services and funds team at Chrysostomides may be able to assist you. Please do not hesitate to contact us.