Brexit takes place in March next year, regardless of the fact that there may be an agreement (so far with little detail) about a transition period in place until 2020.
Most applications for authorisation as an intermediary take 6 or so months for approval once they have been lodged. In some jurisdictions that may be a little longer.
Many intermediaries authorised in the UK need to establish an EU authorised intermediary in order to guarantee the continued flow of European based risks into the London market. Where they want to continue their historical trading relationships with clients and producing brokers based in the EU by utilising their UK staff they are likely to have been informed that they will not only need an EU authorised intermediary, they should also have a UK branch of that EU intermediary.
At present the FCA has no real process for approving UK branches of EU authorised intermediaries other than the EU law based passporting process. The FCA has confirmed that it will have an arrangement in place for passported branches in 2020 when necessary but for the moment it does not and does not know what the 2020 process will be, though it may possibly be some form of grandfathering.
That effectively means that at present there is a legal process for EU authorised intermediaries to be able to trade in the UK until 2020 as a branch if they have been passported in. When however will the right to passport in cease? Without the detail on the transition period being agreed or for that matter being legally binding it is quite possible that we will see a situation where an EU authorised intermediary will have the right to passport in until March next year but, if not passported in by that time, may no longer have a legal basis on which to be passported in.
That would mean that any EU authorised intermediary should be looking to ensure that they have their passporting rights in place before March 2019. It also means that any UK firm wishing to set up an EU authorised intermediary needs to have it authorised before March next year and passported in by the same time.
Recognising that the passporting process may take a month (or more) means that any UK authorised firm which has not filed its application for authorisation of a sister trading company in the EU by the end of July may find they have left things too late.
It is potentially therefore crunch time for decisions to be made and applications to be filed.
