The changes continue: UK financial services authorisation and supervision post-Brexit
05 January 2018
The UK regulation of EEA firms and funds post-Brexit - clarity on how the FCA rule-set will apply to firms that avail themselves of the temporary permissions regimes
Following the European Council’s confirmation on 15 December 2017 that sufficient progress had been made to move to the second phase of Brexit negotiations, we saw HM Treasury (HMT), the UK authorities and the European Insurance and Occupational Pensions Authority (EIOPA) make a number of statements and publish supporting documents setting out their proposed post-Brexit framework for financial services authorisation and supervision. These policy developments will be of particular interest to European firms operating in the UK.
The coordination was clearly intended to show a thoughtful and measured approach by the UK government and regulatory authorities demonstrating to the EU and beyond the UK’s commitment to maintaining stability, certainty and transparency for international banks, insurers and central counterparties operating in the UK. Whilst the government will ensure there is a legislative framework to minimise the potential for any cliff-edge at Brexit, the regulatory authorities are proactively revising their policies to reflect the implications of the likely loss of passporting for relevant firms and, in the context of branch authorisation and supervision, broadly reflecting the current approach to supervision of third country banks.
We have summarised the proposed approaches for international banks (including designated investment firms), non-UK CCPs and third-county insurance branches/subsidiaries.