Brexit — The Temporary Permissions Regime (“TPR”) — A Reminder

In the event of a no-deal Brexit, reciprocal market access would no longer be available through the passporting arrangements between the EU and the UK for firms and investment funds. The UK would become a ‘third-country’ and EEA-based firms might need to seek authorisation in the UK to continue to access the UK market. Additionally, EEA-domiciled investment funds would need to seek recognition in the UK to continue to be marketed here.

Funds that will be able to use the TPR are:

  • EEA-domiciled UCITS funds that have been recognised under FSMA s.264 to market to all investors in the UK;
  • EEA-domiciled AIFs which are entitled to be marketed to professional investors in the UK under Regulations 49 or 50 of the Alternative Investment Fund Managers Regulations 2013, following receipt by the FCA of a regulator’s notice or following approval by the FCA, where required;
  • EuVECA and EuSEF which immediately before exit day have been notified to the FCA for marketing in the UK in line with Article 16(1) of the EuVECA Regulation or Article 17(1) of the EuSEF Regulation; and
  • ELTIF which are entitled to be marketed to all investors, or to professional investors only, in line with the notification procedures for AIFs described above.

Should firms market EEA domiciled funds as outlined above in the UK, in order to be able to continue to do this following a no-deal Brexit, notifications via the Connect system need to be made to the FCA.

As of the 3rd April, the FCA have advised that the notifications should be made by the close of business on 11 April 2019.

For the avoidance of doubt, the following funds can continue to market in the UK and do not need to use the TPR:

  • UK authorised funds — (i.e. UCITS schemes, non-UCITS retail schemes and qualified investor schemes);
  • funds marketing in the UK using certain exemptions in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 or the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001;
  • non-EEA AIFs marketed in the UK through private placement, including certain feeder funds dedicated to a non-EEA master AIF;
    AIFs which have received individual recognition from the FCA under FSMA s.272, giving them the right to market to all investors in the UK; and
  • closed-ended investment companies whose securities are officially listed or admitted to trading on a regulated UK market.