On July 24, the Bank of England (BoE) published a webpage on its and the UK Prudential Regulation Authority’s (PRA’s) approach to the temporary permissions regime (TPR) and the temporary recognition regime (TRR).
The TPR aims to enable EEA firms currently using a passport operating in the United Kingdom to continue their activities in the United Kingdom for a limited period after the United Kingdom’s withdrawal from the European Union on March 29, 2019 (Exit Day).
The purpose of the TRR is to provide a similar framework for non-UK central counterparties (CCPs) that are currently permitted to offer clearing services in the United Kingdom, either from elsewhere in the European Union or from a third country. To enter the TRR, eligible CCPs will need to inform the BoE before Exit Day of their intention to provide clearing services in the United Kingdom. CCPs in the TRR will be deemed recognized to provide clearing services in the United Kingdom for a maximum of three years, extendable by HM Treasury in increments of 12 months.
The BoE’s webpage provides details of the approach of the BoE and the PRA to notifications by firms intending to use the TPR or the TRR and the rules that will apply to firms in the TPR.
The BoE and the PRA expect to provide further guidance to firms on the TPR and the TRR in due course, including the notification process for entry. The PRA intends to consult in fall 2018, in co-ordination with the UK Financial Conduct Authority as appropriate, on proposed changes to its broader rules relating to the TPR.
The BoE’s and the PRA’s approach to the TPR and TRR is available here.