The Financial Conduct Authority (FCA), the regulatory arm of businesses in the UK, has recently given more info to firms regarding the new period of implementation for Brexit.
Finally Starting It Up
On the 31st of January, 2020, the United Kingdom (UK) will officially leave the European Union (EU). After this date, an official implementation period will commence, which will last for the entirety of the year 2020 and will only end on the 31st of December, 2020. Throughout this period of implementation, the relevant EU laws will continue to apply within the UK, with funds and firms remaining to gain benefits of passporting between EEA and the UK. Furthermore, consumer protections and rights that were initially derived from the EU laws will stay as they are.
The regulator put its utmost stress that there will be no change in the reporting obligations a firm must meet. This includes firms that must do MiFIR transaction reporting, CRAs, and those under EMIR. All of these aforementioned firms will still be operated under EU regulatory requirements since the country itself adopted them as well.
Grace Period Notifications
There will be a window for EEA firms to notify the FCA should they want to make use of the new Temporary Permissions Regime, or TPR. The same goes for fund managers wishing to make use of the Temporary Marketing Permissions Regime, or TMPR. Both these groups need to notify the FCA before the end of the 30th of January, which is already over in most countries at the time of writing.
Of course, both fund managers and firms that have submitted notifications already, can sleep easy tonight and not need to take further action. Those that missed it will have a new chance since the FCA will open the notification window later this year. This will allow firms and fund managers another opportunity to throw in additional notifications before the implementation period ends.
Easing Growing Pains
The TPR will allow for firms based on the EEA, passporting within the UK to continue its existing or new regulated business. This will be done within their current permissions’ scope within the UK, and will only act like this for a limited time period. Within this time, it’s expected that both firms and fund managers need to seek full authorization by the FCA. The regime also allows for EEA-domiciled investment funds that make use of a passport to market within the UK.