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UK offers lifeline to EU "passported" businesses operating in the UK if a "no deal" brexit happens.

BIScom Subsection: 
CoNet Administrator

A temporary permissions regime was put in place in January after the House of Commons rejected the May/EU deal. Exit day may have been postponed for a short time but increasingly there is a possibility that contingency plans must be made. Time is running out to act under the regime, unless the FCA chooses to extend it. The deadline is, as of now, 28th March 2019.

The temporary permissions regime will allow EEA-based firms currently passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation, if the UK leaves the EU on exit day without an implementation period in place. It will also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK.

The Financial Conduct Authority said in a statement on 7 January

Firms will need to notify us that they wish to enter the temporary permissions regime using our Connect system. Fund managers will also need to notify us of which of their passported funds they wish to continue to market in the UK temporarily via Connect.

The notification window opens today (7 January 2019) and closes at the end of 28 March 2019. We have also published a guide for Connect covering the notification process for firms (PDF) and investment funds (PDF).

There will be no fee for notifying for the regime and firms and fund managers should not wait for confirmation of whether there will be an implementation period before they submit their notification.

Firms that have not submitted a notification will not be able to use the regime.

Firms that do not notify us that they wish to use the temporary permissions regime will, where they meet the relevant conditions, be subject to the financial services contracts regime. We expect to consult on our approach to this regime shortly.

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. 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.

Further reading: https://www.fca.org.uk/news/ne...