On 24 July 2018, the FCA published its approach to the temporary permissions regime (TPR) for EEA firms and funds passporting into the UK.

  • The TPR is designed to enable EEA firms currently operating in the UK to continue using their passport for a limited period after Brexit (the draft Regulations envisage a 3 year period).

The FCA sets out its proposed approach to:

  • The application of the TPR;
  • The process for EEA firms and funds to notify the FCA that they intend to use the TPR; and
  • The FCA rules that will apply to firms in the TPR.

FCA consultation will commence in Autumn 2018 relating to the applicable rules, fees and levies, with a policy statement and final rules to be published in early 2019.

Separately, on 24 July 2018, the BoE published a webpage setting out its and the PRA’s approach to both the TPR and the temporary recognition regime (TRR).

The TRR provides a similar framework to the TPR but is applicable to non-UK central counterparties (CCPs). Non-UK CCPs must inform the BoE before exit day if they intend to continue providing clearing services in the UK, which can be done either by notification to the BoE or by application for recognition. CCPs using the TRR must apply for recognition within 6 months of the start of the TRR.

The BoE and PRA expect to provide further guidance on the TPR and TRR notification process in due course, encouraging firms to engage with them on the authorisation and recognition process early.