In December 2017, the Government announced that in the event of a "no deal" Brexit, it would introduce a temporary permissions regime (TPR) for inbound passporting EEA firms and funds. If there is no implementation period, the UK will become a ‘third-country’ and EEA firms will no longer be able to passport funds and services into the UK. Both firms and investment funds will be required to seek authorisation from the FCA to access the UK market.
Under the TPR, EEA firms currently passporting into the UK can notify the FCA that they wish to make use of a temporary permission to access the UK market. Once within the TPR, firms will have a maximum of three years (depending upon their allocated "landing slot") within which to obtain recognition or authorisation in the UK.
Fund managers will need to notify the FCA which of their passports they wish to continue to use in the UK temporarily using Connect, the FCA’s online system to submit applications and notifications. On 7 January 2019, the FCA published a direction to operators of EEA UCITS and a direction to operators of AIFSs, EuVECAs, EuSEFs and certain AIFMs to make temporary permissions notifications. Notifications need to be submitted between 7 January 2019 and the end of 28 March 2019. The FCA has published a Guide to Connect for Fund Managers and a Guide to Connect for Firms.
Fund managers should not wait for confirmation of whether there will be a Brexit deal before they submit their notification. Once the notification window has closed at the end of 28 March 2019, fund managers that have not submitted a notification will be unable to use the TPR and will not be able to continue marketing the fund or provide services into the UK without appropriate authorisation.