The implementation deal, agreed on 19 March between Brexit secretary David Davis and EU negotiator Michel Barnier, allows passporting to continue until the transition period ends in December 2020.
The government has also committed to a “temporary permission regime” as a backstop, which would allow EU firms to continue their activities in the UK for a limited period after withdrawal.
The FCA said in a statement UK firms and funds passporting into the EEA should discuss the implications of the implementation period with their relevant EU regulator.
“The FCA will continue to cooperate closely with the home state regulators of EEA firms and the European Supervisory Authorities, and we stand ready to work with them to address any risks to consumer protection and financial stability,” the UK regulator said.
It said it continues to work with the Treasury, the Bank of England and the Prudential Regulatory Authority to ensure the UK’s legal and regulatory framework functions under any type of Brexit.
However, the Bank of England said it was acting under the presumption that there will continue to be a high degree of supervisory cooperation between the UK and the EU. It said in the “unlikely” event that the withdrawal agreement is not ratified, the temporary permissions regime “provides confidence that a back-stop will be available”.
“This reflects the UK’s financial system’s role as both a national asset and a global public good, bringing shared risks as well as wide benefits,” the UK central bank said in a separate statement issued today.
Today the Bank wrote to firms currently using passporting or the EU framework for central counterparties to work under the assumption authorisation will only be needed at the end of the implementation period.
Temporary permission regime
The government announced in December 2017 it would be introducing legislation that allows passporting firms and funds to manage existing business, continue performing contractual rights and obligations, undertake new business within the scope of their permissions and mitigate risks associated with the sudden loss of permission.
The FCA expects firms and funds will have to notify the regulator if they wish to benefit from the regime but said it will release more details later in the year.
Earlier this month it launched a survey to collect information from firms in the European Economic Area who want to benefit from the regime.
