On 10 October 2018, the Financial Conduct Authority (FCA) published a consultation paper, CP18/29, on the temporary permissions regime which will allow EEA firms and funds passporting into the UK to continue operating here for a limited period after Brexit while seeking full UK authorisation.
The consultation paper sets out:
- details of the regime for both firms and fund marketing activities, including which firms and investment funds can use the regime (see chapter 2);
- how the regime will operate for firms including what the FCA expects from firms and how it will supervise them (see chapter 3);
- the rules the FCA proposes to apply to firms and fund marketing activities during the regime (see chapter 4);
- additional information for electronic money institutions, payment institutions and registered account information service providers (see chapter 5);
- how the regime will operate for investment funds (see chapter 6);
- the FCA's proposals for how the regime will be funded (see chapter 7)
Generally, temporary permissions firms will need to continue to comply with the rules which currently apply to them based on the activities they carry on, either in the UK or in their country of authorisation (home state) or, if different and where relevant , the country from which they provide services into the UK.
As a result of this approach, the FCA would become responsible for the supervision of these home state rules after Brexit in relation to the firm’s UK business. However, the FCA does not propose to take on responsibility for supervising rules that apply to an investment fund or its manager in their home state.
Comments are requested by 7 December 2018. The FCA intends to give feedback on the consultation paper in early 2019 and publish final versions of the material before exit day.