Financial Conduct Authority
Temporary Permissions Regime – FCA updates two webpages – 5 January 2023
The FCA has updated two webpages on the Temporary Permissions Regime (TPR): (i) covering issues relevant to firms not meeting the FCA’s expectations; and (ii) considerations for firms leaving the TPR.
The first webpage notes that the FCA will seek to ensure that firms, where appropriate, cannot expand their UK businesses while in the TPR, and if they do not voluntarily leave the TPR where they should do, the FCA will take action to remove them. If the FCA does take action against a firm, this may result in the regulator contacting the firm’s home state regulator about the FCA’s concerns and publishing a notice in the UK. The webpage focuses on four scenarios where this would apply:
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firms that fail to respond to FCA’s mandatory information requests;
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firms regulated under the Financial Services and Markets Act 2000 that have missed their landing slot or failed to apply for authorisation by 31 December 2022;
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firms that do not intend to apply for full authorisation; and
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firms whose application for full authorisation is rejected, withdrawn or refused.
The actions the FCA will take against these firms include:
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taking steps to remove the firm from the TPR;
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asking the firm to confirm that it has voluntarily stopped undertaking new business, for example onboarding new customers, or, if it does not voluntarily agree to cease new business, seeking to use its powers to prevent the firm from undertaking new business; and
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for payments and e-money firms, requesting the firm to specify a date on which it will cease to engage in new business and, if it fails to do so, the FCA may specify a date.
The second webpage is relevant to firms that intend to seek authorisation or registration in the UK and thereby leave the TPR. A firm’s application for authorisation or registration should provide sufficient information to enable the FCA to determine whether it meets the requirements for authorisation. In addition, the FCA expects firms to provide any further information it reasonably considers necessary to enable it to determine the application. In the application, firms should:
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explain how it will meet the FCA’s threshold conditions;
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explain how the firm’s UK business will be structured and why the proposed structure will mitigate the risks of harm; and
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take into account the UK’s Senior Managers and Certification Regime (SMCR), particularly reflecting the regime’s aims to reduce harm to consumers and strengthen market integrity by making individuals accountable for their conduct and competence.
Updated webpage: TPR firms that do not meet our expectations
Updated webpage: Considerations for firms leaving the TPR
