The UK left the EU on 31 January 2020, thereby entering into a transition period with the EU, which is due to expire on 31 December 2020 (Exit Day). With Exit Day looming and no equivalence decision or further agreement with the EU announced or expected, it is important that EU financial services firms and funds prepare for a potential hard Brexit (i.e., a no-deal Brexit), which is likely to result in the loss of passporting rights into the UK.
The Financial Conduct Authority (FCA) has established a temporary permissions regime (TPR) and a temporary marketing permissions regime (TMPR) to allow EU firms and funds, which passport into the UK (e.g. under MiFID, UCITS, AIFMD, EMD and PSD) on a cross-border or branch basis, to continue operating in the UK on the basis of their existing passporting permissions for a limited period of time after Exit Day. In order to benefit from the TPR and TMPR, certain notifications are required to be made to the FCA.
The TPR and TMPR notification window is currently closed, but the FCA will reopen it on 30 September 2020. The TPR will cover the firm’s pre-existing business contracts and any new business contracts entered into during the TPR. The Prudential Regulation Authority (PRA) has not announced a re-opening of the equivalent TPR for dual regulated firms (e.g., credit institutions and insurers).