The UK’s top regulator of financial services has ruled out extending its temporary post Brexit licensing regime past the end of the year. It also pledged to finish work on 116 cases that are still outstanding within the next two weeks.
The Financial Conduct Authority (FCA) announced in 2018 the “temporary permits regime”, which offered companies who had used their European licenses to “passport into” the UK, a grace period up to three years after Brexit to make alternative arrangements.
Emily Sheppard, FCA’s chief operations officer, said there were still 116 companies on the original list of 1,475 institutions, including banks, insurers and asset managers. She added that the remaining cases will be resolved by the end the year.
The FCA’s spokesperson, Sheppard, has been criticized for extending temporary licenses to a small number of cryptocurrency companies in the past year. However, Sheppard stated that they will not continue this practice beyond December.
The companies on the TPR were given several options regarding their future. They could either run off their business over a five to ten year period, apply for full authorization in the UK, or move their activities to another fully-licensed company within their group.
The FCA warned that TPRs were only available to those companies who wanted “to operate in the UK on a long-term basis” and that UK could remove them from the TPR regime if they didn’t meet FCA standards.
Sheppard said that only three companies had applied to the FCA for full authorizations, while six were still deciding on their plans for the end.About 80 companies have informed the FCA that they are planning to leave the UK, or start running off.
The BoE declined to comment on the BoE’s dual regulation of the remaining 27.
Sheppard stated that the FCA had “learned” lessons from the criticism it has received, including from the Treasury Select Committee, over its speed in authorising applications. The FCA now uses new practices to give companies a “better expectation of when decisions will made”.