The Prudential Regulation Authority has given firms that can “passport” financial services into and out of the UK guidance on what will happen with a “no-deal” Brexit.
EEA firms passporting financial services into the UK will have to seek authorization from the PRA to carry on business in the UK post-withdrawal.
In the case of an orderly exit from the EU, this authorization would not be needed until the end of the implementation period.
For a “no-deal” scenario, the regulator is seeking powers from the government to allow firms with existing passporting rights to carry on their activities for a limited period of time while they are seeking this authorization.
PRA chief executive and deputy governor Sam Woods says that without an implementation period, the PRA expects to “exercise the powers that government has proposed to provide us to grant transitional relief to ensure that firms have sufficient time to comply with the changes.”
Woods wrote in today’s letter to chief executives today: “The temporary permissions regime statutory instrument is currently being scrutinised by parliament and yesterday passed an important milestone with a Commons debate on the measure.”
Under a temporary permissions regime, a firm with existing passporting authorization can obtain a permission to carry those activities for another three years. With this permission, firms continue to be an authorised person in the eyes of UK law, and can carry on activities they were permitted to do before the exit day,via passporting.
The regulator today also published information on how to enter and exit from the permissions regime, the process for informing the PRA of firms’ intention to make use of the regime, the rules that will apply to firms in the regime, and transitional relief for some of those rules.