11 March 2021

EEA firms: “no longer able to operate in the UK in the same way”

The FCA have spoken: the times they are a-changing. Here’s our latest roundup on UK financial services developments.

1. UK-EU financial services MoU: no progress to report

  “This is an ongoing question for financial services. It’s going to last for 18 months or two years (at least).”

There remains no discernible sign of securing a financial services co-operation framework memorandum of understanding (MoU) before the notional end-March deadline.

Indeed, there is instead prominent reportage of deteriorating UK-EU relations (following UK threats to unilaterally extend TCA grace periods and EU now preparing for legal action), amid “ill will” pronounced in recent newspaper articles.

As before, the continued broad assumption of most is that any agreement declared will be of an interim, high-level nature, i.e. likely to evolve over a long period of time (and unlikely to include EU reciprocal equivalence for UK funds and firms).

However, in one positive outcome – the European Central Bank has published a banking MoU with the Bank of England and UK Financial Conduct Authority (FCA) which formalises initial banking industry supervisory cooperation and information sharing arrangements (22-pages).

2. FCA: updates TPR website content, emails EEA firms

 “Now that the temporary permissions regime (TPR) is in force, we have started to email formal directions to firms in the TPR confirming their ‘landing slot’.”

The Financial Conduct Authority (FCA) are now in the process of emailing formal directions to pre-registered EEA firms operating within the Temporary Permissions Regime (TPR) to confirm their “landing slots” to apply for a full UK license.

The FCA has also updated their TPR website, with new content now available:

  • the Supervising firms in the TPR section explains how FCA will regulate EEA firms, meantime (including the FCA’s ability to vary and / or impose conditions on a firm’s current permissions).
  • the Landing slots for firms in the TPR section outlines what EEA firms are to do once they have received their emailed landing slot (including explanation of opening / closing dates and the application submission process itself).
  • the Cancelling a temporary permission section explains how to cancel temporary permission where an EEA firm operates in either the TPR or a supervised run-off (SRO)

In their FAQ section, the FCA state they will consider requests for re-scheduled application slot (if notified within 20 working days of the firm’s emailed closing date); however, they are not obliged to change a firm’s set dates and “expect all firms to be organised and prepared”.

The FCA also confirm they are unable to defer a closing date beyond 31 December 2022.

Meanwhile, if a firm fails to apply during the allocated landing slot, they risk having their temporary permissions cancelled.

The FCA also draw attention to their recently updated Approach to international firms.

Finally, a reminder that although the 3-year TPR is currently scheduled to end 31 December 2023, this may be extended by the UK Government (by up to one year) in due course.

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