These considerations are relevant to firms that intend to seek authorisation or registration in the UK and thereby leave the temporary permissions regime (TPR).
Deadline for application from firms that previously passported into the UK under Schedule 3 or Schedule 4 to FSMA
Applications for full UK authorisation from these firms must have been submitted by the end of 31 December 2022. An application submitted after this date will be treated as invalid.
If your firm failed to apply by 31 December 2022 we will expect it to voluntarily apply to cancel its temporary permission and either enter SRO (if eligible) from where it can run off its UK business or leave the UK regulatory perimeter.
Where firms do not do this promptly, we will look to take action to cancel their temporary permission.
Firms intending to become an appointed representative
Firms in the TPR that are intending to become an appointed representative[9] (AR) of a UK authorised person should submit a cancellation application before submitting their AR application[10]. Firms should also contact [email protected] to notify us of their plans.
Firms with existing UK top-up permissions
Firms with existing UK top-up permissions should have submitted a Variation of Permissions (VoP) application to vary their existing top-up permissions rather than submitting a new firm authorisation application.
All other firms should have submitted a new firm authorisation application.
Firms setting up UK subsidiaries
Where a firm in the TPR is setting up a new UK subsidiary or varying the permissions of an existing UK subsidiary (as opposed to seeking the full authorisation of a UK branch), we will expect the TPR firm’s UK business to be transferred to the UK subsidiary promptly once it is authorised (or its permission varied). Firms should note that we will take the UK subsidiary’s readiness to receive existing business into our consideration of whether the UK subsidiary is ready, willing and organised.
We will then expect the TPR firm to enter SRO promptly (if it has UK business to run-off that is not transferring to the UK subsidiary) or apply to cancel its temporary permission and leave the regime.
Consumer Duty
Our new Consumer Duty sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first.
It includes:
- a new Consumer Principle that requires firms to act to deliver good outcomes for retail customers
- cross-cutting rules requiring firms to act in good faith, avoid causing foreseeable harm and enable and support customers to pursue their financial objectives
- four Outcomes rules requiring firms to ensure consumers receive communications they can understand, products and services meet their needs and offer fair value, and the support they need.
Find out more about the Consumer Duty[13].
Our approach to international firms
In our approach to the authorisation and supervision of international firms, we set out the factors we will consider when we assess international firms against our minimum standards.
This is relevant for firms from both EEA and non-EEA jurisdictions who intend to apply for authorisation in the UK through a branch, those who have already applied for authorisation through a branch, and those who are already authorised as a branch.
The document will help international firms understand our expectations and how to manage risks when providing regulated financial services in the UK. Dual-regulated firms should also read the relevant supervisory statements and consultations from the PRA.
Read Our Approach to International Firms
This supplements our existing Approach to Authorisation and Approach to Supervision documents and, for dual regulated firms, it will sit alongside the PRA’s Supervisory Statement SS5/21 - International banks: The PRA’s approach to branch and subsidiary supervision[14] and the PRA’s Supervisory Statement SS2/18 - International insurers: the Prudential Regulation Authority’s approach to branch authorisation and supervision[15].
The approach document:
- sets out where we see the key risks that have potential for harm in different scenarios
- outlines potential ways in which these risks of harm could be mitigated
- outlines our expectations around firms seeking authorisation, including firms having:
- a physical presence in the UK
- personnel and adequate systems in the UK to enable us to effectively supervise them
- outlines our expectation that firms consider whether it is more appropriate for them to operate through a UK-incorporated entity subsidiary and seek authorisation on that basis
Firms should also consider our guide to the Senior Managers and Certification Regime (SM&CR)[6] to understand how it will apply to FCA solo-regulated firms.
Investment Firms Prudential Regime
The IFPR aims to streamline and simplify the prudential requirements for MiFID investment firms that we prudentially regulate in the UK.
The regime applies to:
- MiFID investment firms authorised and regulated by us
- Collective Portfolio Management Investment firms (CPMIs)
- regulated and unregulated holding companies of groups that contain either of the above
The IFPR does not apply to PRA-designated investment firms. They will remain subject to prudential supervision by the PRA.
Any application submitted by a firm in the TPR, where the applicant would be in scope of IFPR, should consider the requirements under this new regime.
During the application process we expect firms to demonstrate to us how they will meet their ongoing requirements under the relevant prudential regime, as part of our threshold conditions assessment.
If your firm is in the TPR and you have already applied for authorisation, please note that the application of some of the transitional provisions in the IFPR will be determined by the prudential categorisation of a firm as of 31 December 2021. Your firm should therefore consider the transitional provisions in the IFPR rules.
