As the Brexit deadline is knocking, the United Kingdom’s Financial Conduct Authority (FCA) has launched a consultation process to decide on the authorization and supervision of international companies operating in the country.
The regulator highlighted that these provisions are primarily for the EEA firms that intend to seek authorization in the UK.
The divorce between the UK and the European Union was already finalized and the two are now in a transition period, which will end on December 31, 2020. The EU licensed companies are still operating in the UK under the passporting rights of the Markets in Financial Instruments Directive (MiFID), but that will expire with the deadline.
Companies Preparing for Post-Brexit
Though many companies are trying to circumvent the upcoming uncertainties by forming new subsidiaries, many are still looking at the regulators for a proper framework for business.
FortuneZ recently reported on Revolut’s migration of its business accounts to Lithuania ahead of Brexit to ensure seamless services.
According to the FCA, over 1,500 firms are currently registered in the Temporary Permissions Regime and many will be seeking authorization at the end of the Brexit transition period.
“With the Brexit transition period due to end on 31 December 2020, firms that have registered for temporary permission will need to consider plans for full authorization,” FCA’s international executive director, Nausicaa Delfas said in a statement. “Today we are setting out our expectations for the future authorization and supervision of international firms, to ensure appropriate protection for users of financial services.”
Additionally, the UK regulator stressed that the EEA or non-EEA companies seeking authorization in the UK need to demonstrate readiness with minimum relevant standards. It will receive the outside views on these provisions until November 27, 2020.
“International firms are a key contributor to the success of the UK financial services market. This consultation will give EEA and non-EEA firms a chance to feedback on our future approach to the regulation of international firms,” Delfas added.