Britain is set to reopen its temporary market access regime for EU financial firms in September to help companies through the Brexit divorce period.
Britain left the European Union at the end of January, and the transition period will end in December. There is currently a “temporary permissions regime” in place for EU-based financial firms.
It allows them to continue serving customers in Britain for a limited period so they have time to obtain authorisation under Britain’s rules.
The regime has been closed to new applications but since that decision was made, the UK has decided not to apply for an extension to the transition period.
“Over 1,000 firms and over 600 fund managers have already notified us, and we will reopen the notification window on 30 September,” Nausicaa Delfas, the Financial Conduct Authority’s (FCA) executive director for international, said in an online event.
From 2021, the financial services firms will be “called to apply for permanent authorisation to replace their temporary permission.”
For the firms who do not apply for a temporary permission, or who do not obtain a permanent authorisation, the government has allowed them to continue serving pre-existing contracts in the UK.
Britain and the EU missed the deadline at the end of June to complete “equivalence” assessments of each other’s rules to allow selective access to each other’s financial market. Both have blamed the other for the blown deadline.
Delfas said the FCA had “provided technical advice to the Treasury on these assessments, and was also providing “technical support” for trade negotiations.
Delfas concluded that Britain will “need to continue to prepare for a range of scenarios, to be ready for the end of the year.”