The Financial Conduct Authority has banned a French bank from operating in the UK after it missed its chance to apply for post-Brexit authorisation.
Lyonnaise de Banque missed its so-called “landing slot” under the temporary permissions regime introduced by the regulator in the wake of the EU split, according to a 21 December statement, becoming the first firm to be barred from doing UK business as a result.
The FCA told Lyonnaise de Banque in September last year that it had a window to apply for post-Brexit authorisation between 1 January and 31 March 2022, if it wanted to stay UK regulated, according to a notice issued by the regulator. The bank did not do so.
Parent group Crédit Industriel et Commercial was approached for comment.
Before Brexit, EU finance firms had an automatic right to trade in the UK under a so-called “passporting” deal. The FCA set up its temporary permissions regime ahead of the departure so that firms could still trade over the transition period before the UK officially left the bloc.
The TPR allowed EU firms to stay in business on an interim basis. But they had to seek full authorisation from the FCA or its sister regulator — the Prudential Regulation Authority — to continue to access the UK market once the split was final.
READ FCA snubs post-Brexit ‘poster child’ Darlington in blow to government
Firms began receiving letters from the FCA in March last year to confirm their window to apply. When the first landing slot — which ran from 1 July to 30 September 2021 — closed, fewer than half of the 72 EU firms expected to ask for authorisation had done so, Financial Newspreviously reported. Some compliance experts took this as sign that firms in the bloc were not as keen to stay in the UK as previously thought.
Emily Shepperd, executive director of authorisations at the FCA, said: “We welcome firms to the UK that demonstrate they can operate in accordance with our expectations. If firms are not taking the right steps to do this, we will do what is required to protect the integrity of the UK market.”
Chief executive Nikhil Rathi has spoken of his desire to take a “tough, assertive approach” to firms operating in the City with temporary permissions in the wake of Brexit when their deals expire. As of November last year, the number of FCA staff in international roles had doubled in the five years since the Brexit vote.
More broadly, the FCA has placed a tougher approach to allowing new firms to become regulated as a key pillar of its strategy to stop rogues operating in the UK. A ‘use it or lose it’ drive gave some businesses as little as two weeks to confirm whether they wanted to keep their permissions in certain areas of the market, compliance sources previously toldFN.
However, that tougher approach has led to an increase in processing times. Last November, Financial News revealed that backlogs had gotten so bad that the Association of Professional Compliance Consultants had requested an urgent meeting with the FCA over the “intolerable and unacceptable” delays.
Since then, the FCA has beefed up the number of staff in its authorisations department by around 100. After admitting in an October 2022 update that “a range of factors meant we did not meet some of our timelines” the regulator added there had been a reduction in its pending caseload of around 47%.
To contact the author of this story with feedback or news, email Justin Cash