January 25, 2021

Volume XI, Number 25

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January 22, 2021

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Brexit: UK Temporary Permission Regime for EEA Firms

EEA Firms and funds relying on EEA passporting to do business in the UK should act now if they want to continue carrying on business in the UK on the same basis into 2021.

In light of the United Kingdom’s (“UK”) exit from the European Union, the UK has established a temporary permissions regime (“TPR”). This regime will enable relevant firms and funds which passport into the UK to continue operating in the UK when the passporting regime falls away at the end of 2020.

The TPR is designed to extend the benefit European Economic Area (“EEA”) firms and fund managers have, for example under the Alternative Investment Fund Managers Directive (“AIFMD”) or the Markets in Financial Instruments Directive (“MiFID”), and to enable them to continue their UK business for a temporary period with minimal disruption when the passporting regime ends.

The window for relevant firms and fund managers to notify the Financial Conduct Authority (“FCA”) is still open if they wish to use the TPR. Notifications can be submitted to the FCA via the Connect system until the end of 30 December 2020.

EEA fund managers should review their portfolio of EEA and UK alternative investment funds (“AIFs”).  If there are AIFs that will be marketed to investors in the UK via the AIFMD marketing passport and are going to marketed beyond 31 December 2020 then it should be determined if these AIFs should be registered with the FCA under the TPR now. AIFs without a marketing passport and that are in the pipeline to be marketed into the UK from 1 January 2021 will need to be notified under the National Private Placement Regime (“NPPR”).

Equally, EEA firms providing services or carrying out activities into the UK under an AIFMD or MiFID passport should assess if they will require the relevant passport after the end of this year and if so, they should also consider making a TPR notification in relation to these passported activities/services.  The TPR will allow they such firms to continue operating in the UK within the scope of their current passport permission (as it stands at the end of the transition period) for a temporary period.

The FCA has a dedicated TPR website, which is updated regularly.

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© 2020 Proskauer Rose LLP. National Law Review, Volume X, Number 335
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About this Author

Kirsten Lapham FInancial Services Attorney Proskauer Rose Law Firm, United Kingdom
Partner

Kirsten Lapham is a partner specialising in financial services regulation. She advises a broad range of both institutional and individual clients on a variety of financial services regulatory and compliance issues. Her practice has a specific emphasis on the regulatory issues arising under the AIFMD, and MiFID II for a range of EU and indirectly impacted firms outside of the EU.

Experience in this area includes advising multiple clients on the EU marketing and registration regimes and overlaying local regulatory considerations, such as the U.K. retail distribution...

+44.20.7280.2031
Amar Unadkat Corporate Lawyer Proskauer Rose Law Firm
Associate

Amar Unadkat is an associate in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of regulatory issues including AIFMD, PSD II and MiFID II, both in the UK and at European level.

His clients include investment fund managers, FinTech companies, wealth management businesses, crowdfunding businesses (including P2P lending platforms), banks and funds seeking to market to investors

+44.20.7280.2144
John Verwey, UK, European Level, Finance, Attorney, Proskauer Rose Law Firm
Special Regulatory Counsel

John Verwey is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, change in control, market abuse, Electronic Money Regulations, Payment Services Regulations and client money rules. He represents a variety of clients that range from private equity firms and insurance intermediaries to global investment banks and sovereign wealth funds. 

A particular area of focus for John is the implementation of...

+44.20.7280.2033
Associate

Michael Singh is an associate in the Corporate Department and a member of the Private Funds Group. Mr. Singh graduated from the University of South Wales in 2012.

+44.20.7280.2269
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