Firms Should Take The Opportunity To Make Their Views Known
Irwin Mitchell has welcomed the launch of a Financial Conduct Authority (FCA) consultation on its approach to the regulation and supervision of international firms operating in the UK. Lawyers point out the rules and provisions will be a factor in firms continuing to operate in the UK and in new firms applying to do so post Brexit.
The news is of particular importance to those firms in the European Economic Area (EEA) who intend to seek authorisation in the UK in the future, in addition to those new businesses from outside the EEA who intend to seek such authorisation post Brexit.
While the FCA does not propose to change any existing rules or provisions, there are currently over 1,500 registered with the Temporary Permissions Regime (TPR) who will be watching the outcome of the consultation closely. The deadline for responses is 27 November 2020.
The FCA will be using the consultation to consider how best to safeguard users of financial services in the UK and ensure all potential risks and harms are taken into account. Those who have already sought TPR will now need to consider full authorisation, while any firm seeking such authorisation will require an active place of business in the UK, so its activities can be supervised.
EEA firms without a TPR who require permission to perform an existing contract (and intend to passport into the UK at the end of the Brexit transition period) will enter the Financial Services Contracts Regime. This will provide a limited window of opportunity to continue to service existing UK contracts while, conducting an orderly exit from the UK market.
Expert Opinion“The consultation process is a recognition of the role international firms already play in the UK financial services market and an important step in engaging them with the future regulatory process and encouraging new business, all while protecting consumers.
“Given the current state of negotiations with the EU and the actions of other regulatory bodies, it would be surprising if the FCA was considering major change, but it makes sense for those firms involved to take the opportunity to make their own position clear.
“The expectation is that more international firms from outside the EEA will look to apply and while others will be focussed the key issues surrounding passporting going forward, engaging with this process remains an important step as we move towards the end of the Brexit transition period.” Craig Weston - Barrister & Senior Associate