CP18/29: Temporary permissions regime for inbound firms and funds

Open consultation: CP18/29
10/10/2018
10/10/2018
Consultation closes
07/12/2018
Consultation feedback and final rules
Q1 2019

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.

Read CP18/29 (PDF 2.33MB)

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.

Find out more about the regime

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

What you need to do

We want firms and fund managers who may want to enter the temporary permissions regime to give us feedback on our proposals.

The consultation period is eight weeks. Please send us your comments by 7 December 2018.

Online response form

You can also:

  • email your responses to [email protected]
  • write to us at: Gavin Davies, Financial Conduct Authority, 12 Endeavour Square London E20 1JN

Prepare for the regime

Firms and fund managers should also take these steps now to prepare to enter the regime:

Next steps

We will publish our feedback and the final text of the proposed rules in early 2019, before exit day.