Brexit and financial services—temporary permissions, temporary recognition regimes and the financial services contracts regime for inbound passporting EEA firms and funds
Brexit and financial services—temporary permissions, temporary recognition regimes and the financial services contracts regime for inbound passporting EEA firms and funds

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Brexit and financial services—temporary permissions, temporary recognition regimes and the financial services contracts regime for inbound passporting EEA firms and funds
  • Why might a temporary permissions regime and temporary recognition regime be needed?
  • How do the temporary permissions regime and the financial services contracts regime work?
  • Temporary permissions in relation to e-money and payments services firms
  • Temporary recognition regime
  • Temporary designation framework for settlement finality
  • Practical steps for EEA firms and non-UK CCPs to take now
  • Key dates in relation to the temporary permissions regime, temporary recognition regime and temporary designation regime
  • Brexit—Financial Services timeline

Why might a temporary permissions regime and temporary recognition regime be needed?

In December 2017, HM Treasury announced that, if necessary, it would introduce a temporary permissions regime for inbound passporting EEA firms and funds, and a temporary permissions regime for non-UK central counterparties (CCPs). The Financial Conduct Authority (FCA) responded to this by setting out what its initial approach would be in its statement on EU withdrawal on 20 December 2017. The Prudential Regulation Authority (PRA) and the Bank of England (BoE) also set out how they would approach the temporary permissions and temporary recognitions regime.

This Practice Note provides further details of the temporary permissions regime that would apply to EEA passporting firms if the UK leaves the EU without a deal. This will occur if the EU/UK Withdrawal Agreement is not ratified by the UK Parliament before exit day (as defined in the European Union (Withdrawal) Act 2018 (EU(W)A 2018) as (amended)) resulting in the UK leaving the EU without the transition period that is proposed in the Withdrawal Agreement.

If the Withdrawal Agreement is not ratified by Parliament and as a result there is no implementation period, the passporting regime would fall away when the UK leaves the EU and EEA firms will be unable to operate in the UK without UK authorisation as they