{"id":874,"date":"2021-03-19T10:48:15","date_gmt":"2021-03-19T10:48:15","guid":{"rendered":"https:\/\/www.effectacompliance.com\/?p=874"},"modified":"2021-03-22T20:27:01","modified_gmt":"2021-03-22T20:27:01","slug":"eu-firms-using-the-temporary-permission-regime-should-look-out-for-their-landing-slot","status":"publish","type":"post","link":"https:\/\/www.effectacompliance.com\/eu-firms-using-the-temporary-permission-regime-should-look-out-for-their-landing-slot\/","title":{"rendered":"EU Firms using the Temporary Permission Regime should look out for their Landing Slot"},"content":{"rendered":"\n

Background<\/strong><\/h3>\n\n\n\n

As firms will no doubt now be aware, the United Kingdom (\u201cUK\u201d) voted to leave the European Union (\u201cEU\u201d) at 11:00 pm on the 31 December 2020 (\u201cBrexit\u201d) and the UK is now classified as a \u201cNon-EEA\u201d country. Consequently, for UK and European financial services firms, this was a moment of significant change and therefore closes one era of opportunity, but it also opens another\u2026<\/p>\n\n\n\n

A Trade and Co-operation Agreement (\u201cTCA\u201d) has been agreed between the UK and the EU but this does not include any substantive provisions in relation to on-going financial services.  From 1 January 2021, cross-border financial services trade between the UK and the EU will be governed by the UK and EU third country equivalence regimes embedded into the respective financial services regulations. <\/p>\n\n\n\n

The UK has found the EU equivalent in respect of 28 regimes and the EU has found the UK temporarily equivalent in respect of only central counterparties (for 18 months) and central security depositories (for 6 months). The EU has said that there will be no extensions to these regimes as it seeks to move the relevant derivatives and custody business onshore and into EU frameworks.<\/p>\n\n\n\n

What about the equivalence question on financial services? The TCA does not at this stage include any elements pertaining to any equivalence frameworks for financial services between the UK and Europe. The EU has assessed the UK’s response to the Commission’s equivalence questionnaires and a series of further clarifications are needed, particular regarding how the UK will diverge from the EU regulatory framework having now left Europe and how the UK will use its supervisory discretion regarding EU firms and how the UK’s temporary regimes will affect EU firms moving forward.<\/p>\n\n\n\n

As the UK is no longer part of the EU, European incoming firms and European firms currently using a UK \u201cservices\u201d or \u201cbranch\u201d passport can no longer make use of the \u201cpassporting\u201d regime available to firms within Europe. The Financial Conduct Authority (\u201cFCA\u201d) established a temporary permissions regime (\u201cTPR\u201d) to enable EU firms to continue to service existing clients into and from the UK for a limited period post Brexit, before deciding whether to apply for authorisation with the FCA, or cease undertaking their services into the UK entirely.<\/p>\n\n\n\n

The TPR allows an EU firm to:<\/p>\n\n\n\n