FCA sets out its approach to international firms
03 February 2021
The publication explains how the FCA will assess international firms when they apply for authorisation to operate in the UK market.
The FCA
has considered responses to a consultation published last year
(CP20/20) and today we have also published a feedback statement
alongside the approach document.
The FCA expects firms seeking
authorisation to have an active place of business in the UK to enable us
to effectively supervise its UK activities.
International firms serving UK customers can sometimes create
different risks of harm compared to UK firms because of the way their
businesses are structured and operate. In the approach document the FCA
sets out how these risks may be mitigated, and the factors that will be
taken into account when deciding whether it may be more appropriate for
an international firm to seek authorisation as a UK incorporated firm
for all or part of its business.
Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority, said:
'Our approach to authorising international firms, including EEA
firms currently in the Temporary Permissions Regime, is to mitigate the
risks of harm to UK customers and ensure market integrity.
'Any firm intending to apply for FCA authorisation, should take note of our expectations set out in the approach document and be ready to meet our standards.'
Notes to editors
- Read Our Approach to International Firms and the Feedback Statement.
- Some EEA-based firms that previously passported into the UK have entered the Temporary Permissions Regime (TPR).
These firms are shown as such on the Financial Services Register, and
are allowed to operate within the scope of their previous passport for a
limited period while they seek UK authorisation.
- EEA firms that did not enter the TPR
and required permission to perform an existing contract, entered the
Financial Services Contracts Regime. This allows them, for a limited
period, to fulfil their contractual obligations existing at the end of
the Brexit transition period to UK
customers while conducting an orderly exit from the UK market. It also
applies where a firm that was in the TPR fails to obtain authorisation.
- In the case of dual-regulated firms, the Prudential Regulation Authority is the lead authority for authorisation but the FCA must also provide its consent. Firms should read and understand the PRA's and FCA's approaches.
- Under FSMA the FCA’s
strategic objective is to ensure that relevant markets function well
and its operational objectives are: to secure an appropriate degree of
protection for consumers, to protect and enhance the integrity of the UK
financial system, and to promote effective competition in the interests
of consumers.
- Find out more about the regimes for EEA firms and investment funds that used to passport into the UK.
- Find out more about the considerations for EEA firms leaving the TPR.
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