The Financial Conduct Authority has cancelled the temporary post-Brexit regulatory permissions of four European firms.
The regulator has also issued a warning to European firms not to use temporary, post-Brexit regulatory permission as a route to continue operating in the UK indefinitely.
The watchdog said that the four firms, two based in Cyprus, one in Germany and one in Spain, did not respond to mandatory information requests despite being given multiple opportunities.
The four firms are Arumpro Capital Limited of Cyprus, Esfera Capital Agencia de Valores SA of Spain, Evest Limited of Cyprus and INZMO Europe GmbH of Germany.
Firms that have had their permissions cancelled can no longer conduct regulated business in the UK and will be committing a criminal offence if they do so.
In a notice today, the FCA reminded European firms wishing to remain in the temporary permissions regime that they needed to meet the regulator’s standard in order to continue operating in the UK.
It said that the temporary permissions regime should only be used by firms who want to operate in the UK in the long term and meet the standards to do so.
Emily Shepperd, executive director of authorisations at the FCA, said: “The UK 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.”
Firms may be asked to stop taking on new business or could be removed from the temporary permissions regime if they miss their ‘landing slot’, fail to respond to mandatory information requests, have no intention of applying for full authorisation, or if their authorisation application is refused.
The temporary permissions regime (TPR) was introduced when the passporting regime for European Economic Area (EEA) financial services firms ended with Brexit on 31 December 2020.
As part of the UK’s preparations for Brexit, the UK Government established the temporary permissions regime for firms based in the EEA, and the temporary marketing permissions regime for EEA-based investment funds that passported into the UK.
The TPR allows EEA-based firms that were passporting into the UK at the end of the transition period to continue operating in the UK within the scope of their previous passport permission for a limited period after the end of the transition period.