By Christopher Walker
On 1 December the FCA published an update reminding firms that with one month to go until the end of the UK’s Brexit transition period, that EU laws “will no longer apply and passporting will end” at 23:00 on 31 December 2020.
Key reminders within the update include:
- The FCA’s use of the Temporary Transitional Power (“TTP”), which will provide firms with some additional time to adapt to new UK requirements “on a broad basis from the end of the transition period until 31 March 2022”;
- The key requirements that firms will need to comply with by 1 January 2021, including (non-exhaustively) areas such as MiFID II reporting requirements, MAR and CASS; and
- The cessation of passporting rights on 31 December, noting that “firms [intending] to carry on providing services currently covered by a passport will need to ensure they will be able to do so after the end of the transition period”.
The FCA notes that where firms currently rely on a passport to “provide services to or from the UK, and proposes to cease those services at the end of the transition period, the FCA expects them to ensure the right outcomes for their customers, and provide timely communications to enable them to make appropriate decisions”.
Two regimes to remember: TPR and FSCR
The UK’s Temporary Permissions Regime (“TPR”) allows firms that intend to continue providing services within the UK to continue to do so whilst they make an application for full authorisation within the UK financial regulatory regime; firms have until 30 December 2020 to notify the FCA via Connect of their intention to enter the TPR.
The Financial Services Contracts Regime (“FSCR”) is the alternative route to the TPR designed to “enable passporting firms that do not enter the TPR to continue to service UK contracts entered into prior to the end of the transition period (or prior to when they enter FSCR) in order to conduct an orderly exit from the UK market once the transition period has ended” and separately for use where firms that “are unsuccessful in securing authorisation when leaving the TPR but still have regulated business in the UK to run off”.
The FCA’s dedicated Brexit webpages can be accessed here and firms can also contact the FCA’s Brexit information line on 0800 048 4255.
"To help minimise disruption, we have onshored EU legislation and established temporary regimes to allow non-UK firms and funds to operate in the UK after 31 December 2020." (Nausicaa Delfas, Executive Director of International at the FCA)