With the Brexit deadline just around the corner, the Financial Conduct Authority (FCA) announced this Monday morning that the notification window for its contingency plan, the temporary permissions regime, is now open. The regime concerns firms passporting into the UK from any European Economic Area (EEA) country, electronic money institutions, payment providers fund managers, etc.
As Finance Magnates reported in October, should the United Kingdom exit the European Union without a grace period in place, the temporary permissions regime allows firms within the EEA that are currently passporting in the UK to continue to do so for a limited period while they seek full FCA authorization.
Passporting is when an EEA-registered firm exercises its right to do business in other EEA countries without needing further authorization in each country. This has allowed UK brokerages and other financial institutions to operate within the EU and vice versa without needing additional authorizations.
However, with the Brexit deadline just months away, passporting rights for the UK may come to an end if government officials do not come to an agreement and no grace period is implemented. This is referred to as a hard Brexit.
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Through the regime, the FCA is aiming to ensure a smooth transition for EEA firms and funds which are currently passporting into the UK by giving them extra time to become regulatory compliant.
FCA: notification window closes on 28th of March
In order to be apart of the watchdog’s regime, which is operated through its Connect system, firms need to notify the British regulator as soon as possible. The notification window opens today and closes on the 28th of March, 2019. There is no fee for the notification process.
According to the statement, fund managers will also need to clarify to the regulator which of their passported funds they want to continue to market in the United Kingdom via Connect. If a firm does not submit a notification before March 28, then they will not be able to use the regime.
“Once the notification window has closed, fund managers that have not submitted a notification for a fund will be unable to use the temporary permissions marketing regime for that fund,” the statement said.
“They will not be able to continue marketing that fund in the UK on the same basis as they did before exit day. The only exception to this is for new sub-funds of EEA UCITS that are in the temporary permissions marketing regime on exit day. It is possible for such new sub-funds to enter the temporary permissions marketing regime after exit day.”