Regimes for EEA firms and investment funds that passported into the UK

Following the end of the Brexit transition period, EEA-based firms and investment funds can no longer passport into the UK. The Government has established 2 regimes to help firms and investment funds that previously passported into the UK to either continue operating in the UK or conduct an orderly exit from the UK market.

The previous passporting regime

Financial services firms in any European Economic Area (EEA) member state could use the passporting regime to establish a presence or carry out permitted regulated activities in the UK without being authorised by the PRA or the FCA. The passporting regime also allowed EEA-based investment funds to be marketed in the UK without being authorised by the FCA.

However, following the end of the transition period, EEA-based firms can no longer passport into the UK and, where necessary, will now need to be authorised and regulated by the PRA and/or the FCA in the UK. Similarly, EEA-based investment funds can no longer be marketed under a passport in the UK.

The temporary permissions regime

The UK Government established a temporary permissions regime (TPR) for EEA-based firms and a temporary marketing permissions regime (TMPR) for EEA-based investment funds that passported into the UK.

The TPR allows those EEA-based firms that were passporting into the UK at the end of the transition period, to elect to continue operating in the UK within the scope of their previous passport, for a limited period after the end of the transition period, while seeking full authorisation by the PRA and/or the FCA in the UK, if this is required.

The TMPR also allows EEA-based funds that were passporting into the UK at the end of the transition period to continue to be marketed in the UK in the same manner as they were before the end of the transition period, for a limited period.

For more information, see our pages about the TPR, including details of the relevant legislation, and the PRA’s website.

The financial services contracts regime

Alongside the TPR, the UK Government established the financial services contracts regime (FSCR). The FSCR ensures that EEA-based firms that were passporting into the UK at the end of the transition period, and who do not enter the TPR, can continue, for a limited period, to fulfil their contractual obligations existing at that time to UK customers while conducting an orderly exit from the UK market.

It also applies at a later point in time where a firm that was in the TPR fails to obtain authorisation from the FCA or the PRA but continues to require UK authorisation in order to perform its existing contracts and conduct an orderly exit from the UK market.

For more information, see our page about the FSCR, including details of the relevant legislation, and the PRA’s website.

Terms you might see in a firm’s details on the Financial Services Register