The application of the FCA’s and PRA’s Temporary Transitional Power (TTP) will end on 31 March 2022. FCA and PRA authorised firms must ensure that they comply with all “onshored” EU legislation by this date.
What is the TTP?
Since the transition period following the UK’s exit from the European Union ended at 11pm on 31 December 2020, “onshored” EU legislation has formed part of UK law. “Onshoring” was the process by which EU legislation and regulatory requirements were amended so they had effect in UK law.
The process of onshoring of EU legislation resulted in some changes to regulatory obligations applicable to authorised firms in the UK. In order to give authorised firms time to adapt to those changes, HM Treasury gave the FCA and PRA the power to make transitional provisions to the UK financial services legislation under the TTP for an interim period.
The regulators applied the TTP on a broad basis from the end of the post-Brexit transitional period. Broadly, and subject to certain exceptions, the effect of the TTP has been to allow firms a grace period to 31 March 2022 to comply with their obligations under onshored EU legislation.
What does my firm need to do?
The FCA has stated expressly that full compliance with all onshored regulatory obligations is required by 31 March 2022, while the PRA has referred to firms preparing for full compliance from 1 April 2022. Firms which haven’t already done so should therefore now be in the process of reviewing their documentation to identify any outstanding points which need to be addressed to ensure compliance with all relevant onshored legislation from that date.
Documentation which may require updating includes:
Client-facing terms and conditions.
Fund documentation, such as prospectuses.
Contracts, for example investment management agreements, distribution agreements.
How can we help?
Our specialist financial services team has deep and broad expertise advising all types of FCA and PRA authorised firms on their legal and regulatory obligations. We regularly advise clients on regulatory change projects, including those arising out of Brexit.