The temporary permissions regime will allow EEA firms and funds to continue regulated business in the UK, if the UK leaves the EU in March 2019 without an implementation period in place. This consultation paper sets out how we expect the regime to work in practice, how firms and funds can enter it, how long it will operate for, and the rules we propose should apply to firms and fund marketing activities during the regime.
We are planning for a variety of outcomes to the Brexit negotiations. One of these outcomes is the UK leaving the EU on 29 March 2019 without an implementation period. If this happens, the passporting regime will no longer be in place and EEA-based firms might experience an abrupt loss of permission and may need to seek authorisation in the UK to continue to carry on a regulated activity in the UK. Similarly, EEA-domiciled investment funds would need to seek recognition in the UK to continue to be marketed here. To address this, the Government has legislated for a temporary permissions regime to allow relevant EEA firms and investment funds to continue to access the UK market while seeking full authorisation or recognition in the UK.
This paper sets out:
- details of the regime for both firms and fund marketing activities, including which firms and investment funds can use the regime
- how the regime will operate for firms including what we expect from firms and how we will supervise them
- the rules we propose to apply to firms and fund marketing activities during the regime
- additional information for Electronic Money Institutions, Payment Institutions and Registered Account Information Service Providers
- how the regime will operate for investment funds
- our proposals for how the regime will be funded
We have tried to balance several factors in putting together our proposals including consumer protection, designing a regime that is proportionate and that firms and fund managers can reasonably comply with from exit day which will therefore minimise disruption for consumers and other market participants.
Who this applies to
These proposals will be of interest to:
- EEA firms, electronic money and payment institutions and registered account information service providers that passport into the UK and Treaty firms
- managers of EEA-domiciled UCITS and AIFs that market those funds in the UK
Who else might be interested in this document:
- current and future customers of firms that currently passport into the UK
- investors in funds that are marketed in the UK but are domiciled in the EEA
- advisors of EEA firms that passport into the UK and fund managers marketing EEA-domiciled funds that passport into the UK
Prepare for the regime
Before notifying, firms and fund managers should take these steps to prepare to make the process as simple as possible:
- register for our Connect system
- firms should check their passport on the FS Register and let us know as soon as possible, through their national competent authority, of any changes. If this information is not on the FS Register, please contact us
- fund managers should check which funds they are actively marketing in the UK and let us know as soon as possible, through their national competent authority, of any changes
Firms and fund managers need to notify us that they wish to use the temporary permissions regime. The notification window is now open and will close at the end of 28 March 2019.
Once you have submitted your notification, you will receive an email from us to confirm that we have received it.
Further information on the temporary permissions regime.
Firms that do not notify us that they wish to use the temporary permissions regime will be subject to the financial service contracts regime.