Brexit Extension – Trick or Treat?

Some good news at last … well for those of us already operating in the space — the UK regulator will be extending the date by which firms and funds can apply for entry into Temporary Permissions Regime TPR to January 31^st 2020. If you have still not decided what you want to do with your European business, you would be well advised to apply now if you have not done so already.

Brexit is all about timing and preparation. We all know the TPR was designed to mitigate the short-terms risk of a no deal Brexit: it was designed to allow firms to continue trading whilst applying to the UK for their full permission. So why then has time been given for to finalise the ‘deal,’ but no similar provision made for firms to implement the deal, by extending the period during which the TPR is operative? And why has no-one come up with a real solution to the underlying FSMA requirement, and the need for a local operating branch?

As one would expect, as with everything Brexit, things change on a daily basis. The UK’s political climate remains unstable and we now have a December General Election whilst we the Financial Services community are kept in the dark. Even the Regulator is forced to behave reactively in unprecedented ways. For example, the arrangements described in the FCA press release of 11 October — due to take effect on 31st October — were suspended on 30th October!

So how can firms best mitigate the risks of Brexit?

How can they best plan?

No apology is made that there is not one sure solution, or one answer for our sector — not even at this late stage.

The best advice one can give is “be prepared” and that means for every eventuality! When putting risk mitigation thinking and practice in place, put your customers at the forefront. Both London Insurance Brokers Association (LIIBA) and British Insurance Brokers Association BIBA continue to work hard in the backgrounds trying to get us heard, the former having been involved in the heart of the discussions, the latter launching its own advice and support site. And for all of you who were waiting to hear and thought a “no deal” was no longer an option – that risk in our view remains real – European leaders are becoming increasingly frustrated. It is highly probable that a number of firms still do not know what they should and will be doing on whatever turns out to ‘B Day’, and we think many firms will find themselves trading illegally or have business they just can’t place.

If you want to protect your EEA customers and UK customers domiciled in Europe, and haven’t already done so, be cautious: get your application in for TPR. A short-term fix it may be, but definitely one way to be prepared.