The UK Government has published draft legislation for the Financial Services Contracts Regime (“FSCR”).
If the UK leaves the EU without a withdrawal agreement, the FSCR will enable firms who do not enter the temporary permissions regime to wind down their UK business in an orderly fashion.
The temporary permissions regime will enable relevant firms and funds which passport into the UK to continue operating in the UK if the UK leaves the EU without a withdrawal agreement and the passporting regime falls away.
Alongside the temporary permissions regime, the Government had committed to introduce further legislation to ensure existing contractual obligations not covered by the temporary permissions regime can continue to be met. The Government has now published draft legislation for the FSCR which will provide a limited period of time during which EEA inwardly passported firms can continue to service UK contracts entered into prior to Brexit, in order to wind down their UK business in an orderly fashion.
The FSCR will provide two discrete mechanisms:
- Supervised run-off – for EEA firms with UK branches or top-up permissions in the UK, and firms who entered the temporary permissions regime but did not secure a UK authorisation at the end.
- Contractual run-off – for remaining incoming services firms.
https://www.fca.org.uk/news/statements/financial-services-contracts-regime
