The Financial Conduct Authority is reassessing how it should authorise and supervise foreign firms providing financial services in the UK as the Brexit transition period ends.
The FCA announced it launched the consultation process in anticipating an increase in the number of international firms seeking authority to operate in the UK. This will affect all firms that are a part of and sit outside the European Economic Area (EEA), which consists of members of the European Union.
The FCA said it does not propose to change existing rules or provisions in this consultation, rather aims to hear views on how it will assess foreign firms against minimum standards when they apply for authorisation.
EEA firms that have notified their intention to enter the UK's Temporary Permissions Regime (TPR) will be allowed to continue operating in the UK within the scope of their current permissions for a limited period after the transition period ends.
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The FCA expects many of these firms will want to seek full authorisation to operate in the UK over the longer term.
Over 1500 have notified their intention to enter the TPR, FCA executive director of international Nausicaa Delfas said, adding that this number is expected to increase when the notification window for entering the TPR reopens on 30 September 2020.
With the Brexit transition period due to end on 31 December 2020, firms that have registered for temporary permission will need to consider plans for full authorisation, Delfas said.
"Today we are setting out our expectations for the future authorisation and supervision of international firms, to ensure appropriate protection for users of financial services.
"Before seeking authorisation, any international firm needs to demonstrate it is ready, willing and organised and meets the relevant minimum standards. Once authorised, firms need to continue to meet those standards, which are designed to protect consumers and ensure the integrity of markets," she said.
The FCA is taking comments until November 27.