On November 7, the European Economic Area (EEA) Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (Passport Rights Regulations) were published together with an associated explanatory memorandum.
The Passport Rights Regulations remove references to the EU’s passporting framework from UK legislation. Additionally (as previously explained in the July 27 edition of Corporate & Financial Weekly Digest), they establish a temporary permissions regime (TPR) to enable EEA financial services firms currently operating in the United Kingdom using a passport to continue their activities in the United Kingdom for a limited period after the United Kingdom’s withdrawal from the European Union on March 29, 2019 (Exit Day), if there is no transition period.
The Prudential Regulation Authority (PRA) also published a direction on November 7 that it gave under the Passport Rights Regulations. The PRA directs EEA firms, authorized by the PRA and that are carrying on a regulated activity in the United Kingdom under passporting arrangements, to notify it if they intend to obtain a deemed permission or variation under the TPR. Firms will have to make notifications by submitting the Temporary Permission Notification Form using the UK Financial Conduct Authority’s Connect system, or by submitting an application to the PRA before Exit Day for UK-specific authorization as a branch. There will be no fee for notifications to enter the TPR and entry into the TPR will be confirmed by email.
The Passport Rights Regulations became effective on November 7, with the exception of certain regulations (such as the repeal of passport rights), which will become effective on Exit Day. EU firms wishing to file Temporary Permission Notification Forms must do so between January 7, 2019, and March 28, 2019.
The Passport Rights Regulations are available here.
The explanatory memorandum is available here.
The PRA’s direction is available here.