The UK's Temporary Permissions Regime (TPR) - the FCA consults

The FCA’s consultation paper CP 18/29, “Temporary permissions regime for inbound firms and funds” sets out possible changes to its rules in the event of a ‘no deal Brexit’. In such an event, there would be no transition period when the UK leaves the EU on 29 March 2019 (Exit Day). The temporary permissions regime (TPR) envisaged would allow (a) firms which currently make use of either a passport under an EU directive or rights under an EEA Treaty and (b) EEA-domiciled funds to continue to access the UK market after Exit Day while they seek, respectively, full authorisation or recognition from the FCA. The TPR would last for a maximum of three years.

Executive Summary

The FCA has consulted in CP18/29, "Temporary permissions regime for inbound firms and funds" (the CP) on a possible temporary permissions regime (TPR).

The TPR would only come into effect in the event of a ‘no deal Brexit’ (ie, no agreement being reached on the terms of the UK’s withdrawal from the EU), in which case there would be no transitional period (also referred to as an ‘implementation’ period) immediately following the UK’s departure on 29 March 2019 (Exit Day).

In preparation for this eventuality, in September 2018, HM Treasury published a number of draft Statutory Instruments (the Draft SIs), which include amendments to the UK’s legal and regulatory framework to create the TPR for firms and fund marketing activities.

The TPR would last a maximum of three years and its effect would be to temporarily

  • authorise an EEA-domiciled firm so it could continue to undertake in the UK the regulated activities covered by its passport as if it were authorised under Part 4A of FSMA 2000 and
  • permit an EEA-domiciled fund to continue to be marketed to UK investors after Exit Day

while the firm or fund sought, respectively, the authorisation or recognition necessary under FSMA 2000.

The CP sets out how the TPR would work, for both firms and fund marketing activities, including which firms and investment funds can use the regime. The CP also explains the rules which the FCA proposes to apply to firms and fund marketing activities during the regime.

The consultation period under the CP runs until 07 December 2018. The FCA intends to publish its final rules in early 2019, ahead of Exit Day.

For further information regarding the TPR, please see the FCA’s webpage.

This Note focusses on the practical implications of using the TPR (rather than on the changes to the FCA’s rules proposed in the CP which would enable it to work) and examines, in turn:

  • Why and when would a TPR be needed?
  • Why is the FCA consulting?
  • The TPR for firms
    • Which firms can use the TPR?
    • How would the TPR work for firms?
  • The TPR for funds
    • Which funds can use the TPR?
    • How would the TPR work for funds?
  • Funding the TPR
  • Applying the FCA’s rules to the TPR
  • Next steps.

Read the full article here.

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.