Emma RadmoreHM Treasury has published a draft SI setting out the proposed conditions for an incoming EEA firm to obtain a temporary permission to continue to carry on regulated activity in the UK after exit day, in the event of the proposed two year transition period not being agreed.
This draft SI applies to firms that are, on the date of exit from the EU, authorised to carry on a regulated activity in the UK on the basis of the financial services passporting regime (payments and e-money institutions will be covered separately). It will enable them to continue to engage in those regulated activities, provided that on or before exit day they have submitted to the relevant regulator an application for full authorisation (or a variation to an existing permission) under the Financial Services and Markets Act 2000, or have submitted a notification to the relevant regulatory that they wish to operate on the basis of a deemed permission.
The draft SI provides that the temporary permission period will last for three years from exit day, although the Treasury will have the power to extend this period if they consider it necessary to do so.
It indicates that it is subject to approval by resolution of each House of Parliament. As Parliament’s summer recess has now started, it seems unlikely that this will be considered (and hopefully passed) before autumn.
HM Treasury has also published a separate draft SI that sets out a temporary recognition regime for non-UK central counterparties (CCP).
The PRA and FCA have indicated that they will be publishing further guidance and consulting on the temporary permissions regime in the Autumn.