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The UK’s top financial regulator has ruled out any extension of its temporary post-Brexit licensing regime beyond the end of this year, vowing to complete work on 116 outstanding cases within the next fortnight.
The Financial Conduct Authority announced the “temporary permissions regime” in 2018, offering companies that had been using their European licences to “passport” into the UK a grace period of up to three years from Brexit to make other arrangements.
FCA chief operations officer Emily Sheppard told the Financial Times that there were 116 companies left on the list of 1,475 banks, insurers, asset managers and other organisations that originally joined the register and that all those cases would be dealt with by the end of the year.
“We as an agency are not extending this regime beyond the end of December,” said Sheppard of the approach of the FCA, which faced political backlash for extending a temporary licensing regime for a “small number” of cryptocurrency companies last year.
Companies on the TPR had several options for their future, including running off their businesses over a period of between five and 10 years, applying for full authorisation in the UK or moving activities to another fully licensed company within their group.
The FCA had warned companies that the TPR was only for those who wanted to “operate in the UK in the long term” and said that the UK could remove companies from the regime if they did not meet the FCA’s standards.
Sheppard said that of the remaining 116 companies, just three had live applications for full authorisations with the FCA, while another six were still confirming their plans for the end of the regime. Some 80 have told the FCA they are preparing to leave the UK or begin run off.
The remaining 27 are dual-regulated by the FCA and the Bank of England’s regulatory arm, and their authorisation falls under the remit of the BoE, which declined to comment.
Sheppard said the FCA, which has faced persistent criticism from stakeholders including the Treasury select committee over the speed of its authorisations, had “learned lessons” and was now using new practices that give companies “better expectations of when decisions will be made”.
