These Regulations repeal EEA Passport Rights under Schedule 3 to the Financial Services and Markets Act 2000 (c. 8) (“the 2000 Act”) and Treaty Rights under Schedule 4 to that Act. A person with an EEA Passport Right or a Treaty Right is one who is authorised in the person’s home EEA state to carry on a regulated activity and, as a result, may become authorised to carry on a regulated activity (see section 22 of the 2000 Act) in the United Kingdom. Reciprocal arrangements are provided by European Union member states.

These reciprocal arrangements will cease when the United Kingdom ceases to be a member of the European Union, and it is not considered appropriate that a person should thereafter carry on a regulated activity in the United Kingdom unless the person is authorised by a domestic financial services regulator. Accordingly, these arrangements represent a deficiency in retained EU law (see section 8(2)(c) of the European Union (Withdrawal) Act 2018 (c. 16)).

These Regulations also make transitional provision so that a person who ceases to be authorised to carry on a regulated activity in the United Kingdom by virtue of an EEA Passport Right or a Treaty Right may continue, for a limited time, to carry on such an activity.

In these Regulations: Part 1 makes general provision as to citation, commencement and interpretation; Part 2 amends Part 3 of the 2000 Act (authorisation and exemption) to repeal provision dealing with the authorisation to carry on regulated activities, within the meaning of Part 2 of that Act, granted to EEA firms (Schedule 3 to that Act) and Treaty firms (Schedule 4 to that Act); the Schedule to these Regulations makes amendments consequential upon these repeals; in Part 3: Chapter 1 provides modifications to Part 4A of the 2000 Act for the purposes of the transitional provisions that follow; Chapters 2 and 3 provide for a person authorised to carry on regulated activities before exit day by virtue of the legislation repealed by Part 2 to continue to do so, by treating the person as having the requisite permission under Part 4A of the 2000 Act, pending the determination of an application for permission, or variation of a permission, under that Part; Chapter 4 provides the procedure by which a person may be so treated; Chapter 5 provides the period during which a person may be so treated; Chapter 6 provides saving provision; Chapter 7 provides general and interpretative provision; Part 4 provides miscellaneous transitional provision in respect of other areas of financial services legislation which have a bearing on the provisions in Part 3; Part 5 provides a power for the Treasury to amend certain time limits set by the modifications made by these Regulations.

An impact assessment of the effect that this instrument, and certain other instruments made by HM Treasury under the European Union (Withdrawal) Act 2018, will have on the costs of business, the voluntary sector and the public sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is published alongside this instrument at www.legislation.gov.uk.