Reforms to the Temporary Marketing Permission Regime (TMPR) set out how new sub-fund launches will be dealt with during landing slots, including future proofing for if/when money market funds (MMF) are found equivalent for the Overseas Funds Regimes (OFR).

On 16 October 2024, a draft version of the Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024 was published.

The regulations amend the Temporary Marketing Permission Regime (TMPR), further operationalizing the newly-introduced Overseas Funds Regime (OFR), and the Temporary Recognition Regime (TRR), which respectively govern the continuing recognition of EEA overseas funds and central counterparties (CCPs) in the UK post-Brexit. 

TMPR changes/OFR operationalization

• extends the TMPR to the end of 2026;
• ensures that an overseas fund’s TMPR recognition terminates if it does not apply for OFR recognition within its landing slot following an FCA Direction;
• prevents an umbrella scheme that has applied for OFR recognition from adding certain sub-funds under the TMPR as follows:

1. non-MMF umbrella scheme: can continue adding new sub-funds up until your landing slot begins;
2. MMF umbrella scheme: can continue adding new sub-funds up until your landing slot begins;
3. mixed scheme: there will be two landing slots for the different sub-fund types
   • can continue adding non-MMF schemes up until its non-MMF landing slot begins;
   • can continue adding MMF schemes during its non-MMF OFR landing slot but must stop doing once its MMF landing slot begins.
4. Whether MMF schemes can market under the OFR is subject to an equivalence determination by the UK Government, but these changes provide the necessary framework for their potential OFR recognition. 

TRR changes

• ensure that the loss of an overseas CCP’s EU recognition no longer automatically revokes its UK recognition under the TRR.

HM Treasury is currently working with the Bank of England to replace the onshored CCP regime (UK EMIR) for CCPs. Much like the TMPR for EEA funds, the TRR ensures that UK market access continues pending the final post-Brexit regime.

Phil Spyropoulos is a Partner, he advises financial institutions on regulation, market practice, and developments relating to investment funds, UK and EU regulatory initiatives and commercial agreements. Lindi Rudman is a financial services lawyer specializing in the global distribution of investment funds and coordination of global regulatory projects.