EEA firms operating through a passport in the UK do so either via a Freedom of Establishment (FOE) passport (if they have a branch in the UK), or via a Freedom of Services (FOS) passport (if they do not have a physical presence in the UK).
EEA firms exercising passport/treaty rights in the UK qualify for authorisation under Schedules 3 and 4 of the Financial Services and Markets Act 2000 (FSMA) and are ‘authorised persons’ for the purposes of FSMA.
Once passporting rights cease – either at the end of an Implementation Period agreed between the UK and the EU, or in the event of a no-deal exit – EEA firms currently relying on passporting arrangements will require authorisation from the PRA (or for solo-regulated firms, the FCA) to undertake business in the UK.
As the Bank has made clear, EEA firms operating in the UK through passporting arrangements may plan on the assumption that permanent PRA authorisation will only be needed by the end of the Implementation Period which has been agreed in principle as part of the UK’s Withdrawal Agreement with the EU. In the event that the Withdrawal Agreement is not ratified, the temporary permissions regime (TPR) provides confidence that a back-stop will be available. Further information on the TPR is available on the dedicated TPR webpage. In addition, the Financial Services Contracts Regime will provide a further back-stop for the orderly wind-down of UK regulated activities of passporting firms that do not enter the TPR, or that exit the TPR without UK authorisation. Further information is available on the dedicated Financial Services Contracts Regime webpage.