"They may plan on the assumption that UK authorisation or recognition will only be needed by the end of the implementation period."
The Bank of England has confirmed its approach to the post-Brexit authorisation and supervision of international banks, insurers and central counterparties.
In the context of their future preparations for the UK’s withdrawal from the EU, EEA banks and insurers may (if they are not conducting material retail business) apply for authorisation to operate as a branch in the UK.
In letters published today, the Bank made it clear to relevant firms that "they may plan on the assumption that UK authorisation or recognition will only be needed by the end of the implementation period".
It said firms carrying out regulated activities in the UK through passporting rights should "plan that they will be able to continue undertaking these activities during the implementation period in much the same way as now".
The Government has committed to bring forward legislation to create temporary permission regimes to allow relevant firms to continue their activities in the UK for a limited period after withdrawal.
The FCA added that "in light of the agreement on the terms of an implementation period and HM Government’s commitment to providing for a Temporary Permission Regime as a backstop, firms and funds currently benefiting from an EU passport need not apply for authorisation at this stage".
The Bank welcomed the agreement between the UK and EU27 that there should be an implementation period until the end of 2020 saying it would be difficult, ahead of March 2019, "for all financial institutions to have completed all of the necessary steps required to mitigate the risks to the provision of financial services in the EU and the UK".