Brexit: FCA Survey for EEA inbound passported firms

Of relevance to: All firms solely regulated by the FCA that passport into the UK (either via a branch or on a cross-border services basis) or market funds in the UK
Key date: Survey closes on 11 May 2018

The Financial Conduct Authority (“FCA”), via a specific webpage entitled ‘Survey for EEA inbound passported firms’, is asking all firms it solely regulates that passport into the UK (either via a branch or on a cross-border services basis) or market funds in the UK to complete a short online survey.

The UK will become a ‘third country’ (being a country that is not a member of the remaining European Union (“EU27”)) on 30 March 2019 (“the withdrawal date”), unless a ratified withdrawal agreement establishes another date.

In December 2017, the UK Government announced that, if necessary, it will legislate to provide a temporary permission scheme for EEA firms and funds passporting into the UK, allowing them, while seeking full authorisation in the UK, to enter into new business and fulfil existing contracts with UK customers for a period of time after the withdrawal date.

The FCA set out in December 2017 initial details of how it intends to use this scheme.

Subject to HM Treasury’s legislation setting up the temporary permission scheme, the FCA’s expectation is that firms and funds solo-regulated in the UK by the FCA would need to notify them before the withdrawal date of their desire to benefit from the regime.

The FCA anticipate this notification will be a relatively simple process and that a system to enable firms and funds to do this will be set up ahead of the withdrawal date. Notification will not require the submission of an application for authorisation in the UK prior to the withdrawal date. In due course, the FCA will set out further details on these proposals and how the scheme will operate.

To help inform these communications and to identify firms for which a temporary permission may be relevant, the FCA are asking relevant firms and fund managers to complete a short online survey. The information will also help contribute to the overall design of the scheme as well as enabling the FCA to communicate directly with interested firms about the scheme and authorisation process.

The Prudential Regulation Authority (“PRA”) previously set out its own proposals. Firms which would be authorised by the PRA should contact the PRA to discuss its proposals.