To be able to continue marketing incoming EEA funds in the UK following a no deal Brexit, notification must be made to the FCA to enter the temporary permissions regime (TPR). The window for making such a notification is now open (until 28 March). Once the window closes, fund managers that have not submitted a notification for a given fund will be unable to use the TPR for that fund and will have to cease marketing the fund in the UK.
It is important to note that the TPR will only come into operation if the UK leaves the EU with no withdrawal agreement such that there are no transitional arrangements in place for non-UK funds that currently utilise EU passports to enable marketing to take place in the UK.
What is the TPR Notification Window?
On 09 November 2018, the FCA published a Direction, confirming that the notification window for funds to notify the FCA that they wish to use the Temporary Permissions Regime (TPR) to continue to market in the UK would open at 9 am on 07 January 2019 and close on 28 March 2019, just before Exit Day.
The notification window is therefore now open and this note provides further details of the way in which the TPR will operate in practice for funds. See our previous elexica articles, “The UK’s Temporary Permissions Regime (TPR) - the FCA consults” and “UK Temporary Permissions Regime - EEA UCITS to be permitted to add new sub-funds after Exit Day” for further details on the TPR.
How do I make a notification?
- Notification is made using the FCA’s “Connect” online system which will already be familiar to UK authorised firms.
For those unfamiliar with the system you will be required to register before a “profile” can be created which provides the access credentials for submitting the notification online.
The Registration process is straightforward and takes a few minutes to complete a “New User Registration Page” followed by an email verification link to establish a profile.
- The next step is to click on the link to “Temporary Permissions (EU Withdrawal)” and to complete the online notification form in respect of all funds for which you wish to continue to market in the UK after Exit Day.
FCA guidance on how to complete the notification form can be found here.
Do I need to make a separate notification for each Umbrella fund or each sub-fund?
The Fund Temporary Permission Regime Notification form will generate a list of standalone funds and umbrella funds (with their sub-funds) of which the FCA already has knowledge. The manager must then select, in each case, those funds or sub-funds which it wishes to continue to market and those which it wishes to cease to market.
Who can make a notification?
Although the FCA has unhelpfully used the general term ‘fund manager’ in several of its TPR documents, it seems clear that the entity which should make the notification for an incoming UCITS is either the EEA UCITS ManCo or the fund itself (where no ManCo has been appointed). In the case of an AIF, the EEA AIFM should make the notification.
What steps should you take following submission of a notification?
- Following notification, you will be allocated a three month ‘Landing slot’, during which you must apply for FCA authorisation.
- Fund managers should check which funds they are actively marketing in the UK and let the FCA know, through their national competent authority, of any changes as soon as possible.
- In particular, if after Exit Day (29 March 2019) a new sub-fund is added to a fund which has applied to enter the TPR, this sub-fund should be notified to the FCA in order to gain the benefit of the TPR.
How can Simmons & Simmons help?
In addition to advising clients extensively in relation to all aspects of Brexit we have also been tracking the various temporary permissions regimes now emerging across EU member states and can assist you with questions on the process in the UK. Please contact us if you would like to discuss other ways in which we may be able to assist in relation to the TPR.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.