TPR firms that do not meet our expectations

The temporary permissions regime (TPR)[1] is only for firms that want to operate in the UK in the long term, have applied for full UK authorisation/registration and meet the required standards.

We will seek to ensure that firms, where appropriate, cannot expand their UK business while in the TPR, and if they do not voluntarily leave the TPR we will take action to remove them. If we do take action against a firm, this may result in us contacting its home state regulator about our concerns and publishing a notice in the UK.
This page focuses on 4 scenarios where this would apply:

• firms that fail to respond to our mandatory information requests 
• firms regulated under the Financial Services and Markets Act (FSMA) that missed their landing slot or failed to apply by 31 December 2022 
• firms that do not intend to apply for full authorisation
• firms whose application for full authorisation is rejected, withdrawn or refused

The actions we will take against these firms may involve:

• taking steps to remove the firm from the TPR
• asking the firm to confirm that it has voluntarily stopped undertaking new business (eg onboarding new customers) or, if it does not voluntarily agree to this, seeking to use our powers to prevent it from undertaking new business
• for payments and e-money firms, requesting the firm to specify a date when it will cease to engage in new business and if it fails to do so, we may specify a date    

A firm may avoid these actions if it voluntarily applies to cancel its temporary permission and, if eligible, enter either the supervised run-off (SRO) mechanism or the contractual run-off (CRO) mechanism (as appropriate) within the Financial Services Contracts Regime (FSCR)[2].

Find out more about cancelling a temporary permission[3].

Firms that fail to respond to mandatory information requests

We expect firms to respond to our requests for information promptly. Firms that do not respond to mandatory information requests (those made under section 165 of FSMA, or otherwise) may be unable to demonstrate that they meet our Threshold Conditions (or Conditions for Authorisation for payments and e-money firms). Specifically, we may consider that these firms are not fit and proper or capable of being effectively supervised.

So far, we have cancelled the temporary permissions of 4 firms that did not respond[4] to our mandatory information requests. These firms are no longer permitted to conduct regulated business in the UK. If they continue to do so, they may be committing a criminal offence.

We will continue to take action against such firms.

FSMA firms that did not apply by 31 December 2022

We expect firms to take regulation seriously and submit their application for authorisation when asked to do so.

A FSMA firm that missed its landing slot, (or otherwise failed to apply by 31 December 2022) will have failed to meet our expectations and, as a result, we will expect it to voluntarily apply to cancel its temporary permission[5] and either, enter SRO to run-off its UK business (if eligible) or leave the UK regulatory perimeter.

Where firms do not take either of these steps promptly, we will look to take action to cancel their temporary permission.

Firms that do not intend to apply for full authorisation 

The TPR was designed to ensure continuity of service for UK customers. It enables firms to transition from the passporting regime to the UK full regulatory regime so they can, temporarily, provide services to UK customers while they seek authorisation or alternatively wind down their UK business.

Firms that have failed to apply for authorisation present a risk of harm, as they can expand their business without any intention of staying in the UK long term, and without having been subject to a regulatory review.

We would expect any firm that wishes to expand its business in the UK to want to be authorised. However, we do accept that there may be some scenarios where firms have valid reasons for not applying for full authorisation. These could include firms that:

• are merging with another entity and then intend to cancel their temporary permission 
• cannot carry on their business under the UK’s post-Brexit onshored regime and so must transfer their UK business to a UK legal entity if they wish to continue to serve the UK market (eg an operator/manager/trustee/depositary of a UK authorised collective investment scheme or a payment services firm)
• are intending to become an appointed representative (AR) of a UK authorised person and intend to cancel their temporary permission before their AR application is submitted

We expect firms without a valid reason for not seeking full authorisation to voluntarily apply to cancel their temporary permission[5] and either, enter the FSCR[6] to run-off their UK business (if eligible) or leave the UK regulatory perimeter.

Where firms fail to take either of these steps, we will look to take action to cancel their temporary permission.

Firms whose application for full authorisation is rejected, withdrawn or refused  

A number of firms in the TPR have failed to provide the minimum information needed to form an application for authorisation. Under these circumstances, we have rejected these submissions and made it clear to the firms that we expect them to voluntarily apply to cancel their temporary permission and either, enter the FSCR to run-off their UK business (if eligible) or leave the UK regulatory perimeter.

Where firms fail to take either of these steps, we will look to take action to cancel their temporary permission.

Where a firm in the TPR has applied for full authorisation but subsequently withdraws its application, we will expect it to voluntarily leave the TPR and will look to take action where it does not.

Where a firm in the TPR does submit an application for full authorisation but fails to meet our standards, we will refuse its application. Refusal will result in the firm’s temporary permission being cancelled with the firm:

• moving to SRO or CRO[7] (as appropriate) if it has UK business to run off, or
• leaving the UK regulatory perimeter, if it does not have UK business to run off

A firm in the TPR whose submission is rejected or withdraws its application cannot re-apply while still in the TPR. However, under these circumstances, firms can apply for authorisation from within the FSCR but will be unable to conduct new business in the UK until their application for authorisation has been successful.