The Financial Conduct Authority (FCA) has launched a consultation on its approach to the authorisation and supervision of international firms operating in the UK.
The consultation, which comes as the financial services industry prepares for Brexit, is relevant to European Economic Area (EEA) firms that intend to seek authorisation in the UK in the future, including those entering the Temporary Permissions Regime (TPR), as well as firms from non-EEA countries that have applied or intend to apply for authorisation in the UK, or are already authorised in the UK.
The FCA stated that it expects an increase in the number of international firms seeking authorisation at the end of the Brexit transition period on 31 December, with over 1,500 firms currently registered in the TPR.
International firms serving UK customers through branches can sometimes create different risks of harm compared to UK firms because of the way their businesses are structured and operate, the regulator warned.
The FCA is therefore asking for views on how these risks can be mitigated, and when it would be appropriate for an international firm to seek authorisation as a UK-incorporated firm for all or part of its business.
The final document, produced following the consultation, will aim to help firms structure their business to provide financial services in the UK and to understand the FCA’s authorisations approach.
Nausicaa Delfas, executive director of international at the FCA, said: ”With the Brexit transition period due to end on 31 December, firms that have registered for temporary permission will need to consider plans for full authorisation - today we are setting out our expectations for the future authorisation and supervision of international firms, to ensure appropriate protection for users of financial services.
“International firms are a key contributor to the success of the UK financial services market, so this consultation will give EEA and non-EEA firms a chance to feedback on our future approach to the regulation of international firms.”
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