What has happened?
The Financial Conduct Authority (FCA) has confirmed that the deadline for notifications for the temporary permissions regime (TPR) will be extended to the end of 30 October 2019. This extension applies only to firms that will be solo-regulated by the FCA. Firms that will be regulated by the Prudential Regulation Authority, that is, credit institutions and insurers, can no longer submit a notification to enter the TPR as their deadline was 11 April 2019.
What does this mean?
The TPR allows EEA-based firms passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation. In addition, it allows EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK.
However, for fund managers, the FCA states that, although it will take updates to existing notifications, it will not be possible to submit a new notification until after 16 October 2019.
For managers updating their notifications, while they can create new draft notifications on the FCA's Connect system, they will not be able to actually submit an updated notification until later in October and then only if they have advised the FCA that they wish to do so by the end of 16 October 2019.
For trade repositories, the deadline for applying for recognition or registration is also extended to 30 October 2019, and similarly for credit ratings agencies applying to convert their ESMA registration or seeking to be included in the temporary registration regime.
For EEA-authorised payment institutions, EEA-registered account information service providers and EEA-authorised electronic money institutions, the notification window for temporary permission is closed, but it will open again under the relevant HM Treasury Regulations on 31 July 2019 and end on 30 October 2019.
It is important that firms plan for all Brexit scenarios, including the possibility of a no-deal Brexit at the end of October 2019.
This means considering whether a notification under the TPR (or equivalent) is appropriate for them.
The FCA has explained previously that, in the event of a no-deal Brexit, it will not take a strict liability approach. Therefore, it will not take enforcement action against firms for not meeting all requirements straight away, where there is evidence they have taken reasonable steps to prepare to meet the new obligations by exit day.
However, having extended the deadline, the FCA now urges firms to use the additional time between now and the end of October to prepare to meet these obligations.
If firms are not ready to meet the obligations in full, the FCA will expect to see evidence why this was not possible.
What happens now?
The FCA will continue to provide updates as necessary on its website and through other channels.
In particular, it will post on its website when notification windows will re-open.
Please contact us if you would like to discuss Brexit planning for your organisation.