In March 2018, the UK and the EU reached agreement on the terms of an implementation or transitional period following the UK’s withdrawal from the EU. This period is intended to operate from 29 March 2019 until the end of December 2020, when any new arrangements are expected to be in place. During this time, EU law would remain applicable in the United Kingdom and firms and investment funds would continue to benefit from passporting between the UK and the EEA. However, the UK Government and the regulators are continuing to prepare for a range of scenarios, including a scenario where the UK leaves the EU without a deal and without entering an implementation period.
The Government said it would bring forward legislation to establish a temporary permissions regime (“TPR”) for inbound passported firms and funds, to enable them to continue their activities in the UK for a limited period after withdrawal in the event of a “crash out” without any agreement, meaning that passporting would otherwise end abruptly. TPR will allow inbound firms and existing passported funds to continue operating in the UK within the scope of their current permissions for a limited period after exit day, while they seek full UK authorisation. The UK Treasury has begun to publish draft legislation for the TPR and the FCA has announced that it will fully consult on the proposals during the coming autumn.
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