The temporary permissions regime operated by the Financial Conduct Authority in the UK (TPR), reopened on 30 September 2020. Here are answers for fund managers of Irish investment funds to some practical questions about the operation of the TPR, including during the notification window which remains open until 30 December 2020.
1. Which funds may avail of the TPR?
The TPR is available to both UCITS (to include sub-funds) and EEA AIFs (marketed to professional investors) which have been passported into the UK for marketing prior to 30 December 2020.
The TPR is also available to UCITS sub-funds which are authorised after 31 December 2020 and which are part of an umbrella which entered the TPR prior to 30 December 2020.
2. If I have already entered the TPR and have established no new sub-fund since my application, do I need to take any other action?
No. If nothing has changed, no further action is required.
If things have changed, see the response to question 5.
3. How can I check which sub-funds have been entered on my existing TPR application?
Fund managers can create new draft notifications on Connect to monitor their fund detail entries.
4. Can a sub-fund which has been authorised prior to 30 December 2020 enter the TPR after the transition period ends on 31 December 2020?
No. Sub-funds which are authorised up to 30 December must be passported into the UK for marketing and must have entered the TPR by the end of 30 December 2020 in order to avail of the regime. To ensure that funds are eligible for the TPR, firms need to factor in sufficient time for the marketing passport to be processed (see the response to question 6) and for the FCA to receive the TPR application.
5. How do I update an existing TPR notification where I am adding an extra sub-fund?
Step 1: Fund managers that want to update their previously submitted notification should email email@example.com no later than the end of 9 December 2020 confirming this and including their Firm Reference Number (FRN).
Step 2: Fund managers then need to submit their updated TPR notification via Connect. They should expect to be able to to do that from 14 December 2020. Fund managers should only submit their updated notification when they are certain that all the correct funds are included. Updated notifications must be received before the end of 30 December 2020
6. What are the timelines?
After a new sub-fund is authorised by the Central Bank of Ireland, it will need to be passported into the UK for marketing before it can be added into the TPR. You will need to factor in the marketing passport processing timeframe (10 working days for a UCITS Directive marketing passport, 20 working days for an AIFMD marketing passport) as well as the time required to enter the sub-fund into the TPR via Connect (1-2 days).
For new sub-funds, there is quite a bit to do, so time is of the essence.
In order to be able to meet the 30 December 2020 TPR notification filing deadline, a UCITS fund should be seeking to apply for the marketing passport not later than the end of November 2020 and an AIF should be seeking to apply for the marketing passport not later than the middle of November. This is necessary to allow for the marketing passport processing timelines as well as any follow on regulatory queries and to allow a TPR application to be submitted to the FCA.
7. What happens once the FCA's TPR notification window has closed?
Fund managers that have not submitted a notification for a fund will be unable to use the TPR for this fund and will not be able to market the fund in the UK until the Overseas Fund Regime (OFR) is in place.
There is no timeframe set out for the introduction of the OFR.
The only exception to this is where an umbrella UCITS that is in the TPR prior to 30 December 2020 and establishes a new sub-fund after 30 December 2020, that new sub-fund can enter the TPR after the transition period ends. This exception is not available to AIFs.
8. What advantage is there to entering the TPR compared to the OFR?
The advantage of opting for the TPR is that you can commence marketing immediately and under a regime with which you are very familiar. The OFR will come into effect once the current transition period ends on 31 December 2020. According to the UK Financial Services Bill, the TPR will operate for a period of 5 years.
9. What happens when you are in the TPR?
The FCA will allocate a landing slot to funds which are in the TPR within its projected 5 year lifespan. During that landing slot, UCITS Funds will need to apply to the FCA for recognition. AIFs will need to apply to the FCA, via their EEA AIFM, to enter the UK's national private placement regime for marketing to professional investors.
10. How do you exit the TPR?
You can exit the TPR if you successfully complete the FCA requirements given to you in connection with your landling slot. If you do not do that, the fund will exit the TPR but will no longer have access to the UK market in the same way as before the end of the transition period.