With the end of the Brexit transition period rapidly approaching, regulated firms must ensure that they are prepared to comply with their new obligations from 31 December 2020 when EU law ceases to have effect in the UK and the post-Brexit UK regulatory regime will instead apply. The European Union (Withdrawal) Act 2018 (EUWA) will “onshore” into UK law existing EU legislation which has direct effect in the UK at the end of the transition period and preserve existing UK laws which implement EU obligations. As part of this onshoring process, some legislation and regulatory requirements have been amended so that they work in a UK-only context, which means that there will be some areas where the requirements on firms and other regulated persons have changed.
To help firms adapt to these new requirements, HM Treasury (HMT) has established the Temporary Transitional Power (TTP), which gives UK financial regulators – the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), and the Bank of England (BoE) – the power to make transitional provisions in relation to financial services legislation for a temporary period.
For EEA firms conducting business in the UK, the temporary permissions regimes will take effect when the Brexit transition period ends on 31 December 2020. They have been established to help these firms and investment funds continue their UK business with minimal disruption when the EEA passporting regime ends at the end of the transition period.
This briefing sets out what firms need to know about the FCA intends to apply the TTP and the temporary permissions regimes – including key areas not subject to transitional arrangements, for which firms need to make preparations without delay. Note that transitional provisions and temporary permissions regimes established by the PRA and BoE are not covered by this briefing.