FCA Revokes Temporary Permissions Of 4 EU Firms Operating In The UK

The U.K.’s Financial Conduct Authority (FCA) has announced that European firms looking to remain in the temporary permissions regime (TPR) must meet the FCA’s standards to continue operating their businesses in the U.K.

As part of the U.K.’s efforts to minimize the impact of Brexit on businesses, the government established the TPR for firms based in the European Economic Area (EEA), which includes all European Union (EU) countries as well as Iceland, Liechtenstein and Norway.

Through the regime, firms based in those countries that were previously passporting into the U.K. before the end of the Brexit transition period (Dec. 31, 2020) could continue operating temporarily in the U.K. after that date.

But in a Tuesday (Jan. 18) statement, the FCA confirmed its approach to European firms temporarily operating in the U.K., stating that the TPR is limited to firms that intend to operate in the U.K. in the long term and meet the necessary standards to do so.

Companies that fail to adhere to these rules, which include failure to respond to mandatory information requests or a lack of intention in applying for full authorization, may be stopped from undertaking new business or could be removed from the TPR entirely, the statement noted.

And true to its word, the FCA shared that four European firms have had their permissions canceled for not responding to the mandatory information requests, despite multiple opportunities to meet this requirement. As a result, these companies can no longer undertake legal business operations in the U.K. and any attempt to do so will constitute a criminal offense.

Emily Shepperd, executive director of authorizations at the FCA, said: “The U.K. is open for business, but not to firms who do not meet our regulatory expectations. We expect firms operating under the regime to be responsive to our requests for information, and that are coherent in their business planning. We will continue to act against firms that fail to meet our standards.”

Read more: UK’s FCA Issued $775M in Fines in 2021

Shepperd’s pledge to act against firms was evident last year when the FCA issued a staggering 568 million pounds (about $775 million) in fines against major banks due to a rise in financial crime fueled by the pandemic.

The annual amount also included levies tied to insider dealing, non-financial misconduct and carrying out regulated activities with no authorization, PYMNTS reported.