The UK’s temporary permissions regime (TPR) was designed to ensure that European firms operating in the UK via a passport when the Brexit transition period ended could continue operating temporarily before they obtain full authorisation in the UK. A number of firms entered the TPR without a firm plan for obtaining full FCA authorisation however the FCA has made it clear that the TPR is only for firms who want to operate in the UK in the long-term, are getting ready for full UK authorisation and are able to meet the required standards. This is particularly relevant to TPR firms who had previously been relying on the cross-border services passport and who do not currently have a place of business in the UK.
On 18 January 2022, the FCA published a new webpage (click here) setting out its approach to firms in the TPR that do not meet its expectations.
On the page the FCA makes it clear that it will be monitoring TPR firms to ensure that they meet its requirements and if they do not, the FCA may take action to remove them. It is important to note that if the FCA does take action against a firm this may result in the FCA contacting a firm's home state regulator and publishing a notice in the UK.
The webpage highlights four scenarios where this would apply:
- Taking steps to remove them from the TPR.
- Asking the firm to confirm they have voluntarily stopped undertaking new business (i.e., on boarding new customers) or, if they do not voluntarily agree to this, seeking to use FCA powers to prevent firms from undertaking new business.
- Directing a FSMA firm to apply in a landing slot sooner than the existing landing slot.
- For payments and e-money firms, requesting the firm specify a date when they will cease to engage in new business. If they fail to do so, the FCA may specify the date.
The FCA has also announced that it has already cancelled the temporary permissions of four TPR firms that, despite multiple opportunities, did not respond to mandatory information requests so it is important to note that the FCA is starting to take action. Emily Shepperd, Executive Director of Authorisations at the FCA, said:
'The UK is open for business, but not to firms who do not meet our regulatory expectations. We expect firms operating under the regime to be responsive to our requests for information, and that are coherent in their business planning. We will continue to act against firms that fail to meet our standards.'
If you need any assistance with complying with the TPR and applying for FCA authorisation please contact Kate Troup.