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PRIN TP 1 – Transitional Provisions

PostedJune 24, 2025
UpdatedJune 24, 2025
ByAndy

1. Chapter Summary

PRIN TP 1 sets out the transitional provisions governing how and when the Principles for Businesses (PRIN) apply to firms, particularly in relation to changes in regulation or the introduction of new rules. This chapter is important because it ensures a clear and orderly implementation of the Principles, allowing firms time to adjust to new requirements and clarifying when older rules may continue to apply temporarily.

2. Applicability

This chapter applies to all firms subject to the Principles for Businesses during periods of regulatory transition, including those affected by Brexit-related changes or FCA rule amendments. It mainly concerns firms adapting from old frameworks to updated PRIN rules and does not usually apply once full compliance with the updated rules is mandatory.

3. Key Rules and Their Meaning

  • PRIN TP 1.1R – Application of Transitional Provisions This rule explains that transitional provisions apply to specified firms and periods, allowing continued compliance with previous regulatory obligations while transitioning to the new PRIN framework.
  • PRIN TP 1.3G – Guidance on Transitional Periods FCA guidance clarifies expectations for firms during transitional periods, emphasizing good faith compliance and communication with the FCA about progress towards full adherence.

4. Interpretation Notes / FCA Expectations

The FCA expects firms to actively manage transitions and not to use transitional provisions as a permanent exemption. Firms should demonstrate clear plans and timelines to meet the updated Principles.

5. Practical Considerations for Firms

Firms should maintain documentation of transitional compliance efforts, communicate openly with regulators, and implement stepwise changes in policies and controls to align fully with updated PRIN requirements.

6. Related Handbook References

  • PRIN 2 – Principles for Businesses
  • SUP – Supervisory Procedures on notifications during transition
  • EUWA – European Union (Withdrawal) Act 2018 for Brexit-related transitional rules

7. Regulatory Focus / Enforcement Risk

FCA monitors transitional compliance closely to prevent regulatory gaps; failure to progress beyond transitional relief may attract enforcement action.