AUTH 5.2 EEA firms and Treaty firms

A person will only be an EEA firm or a Treaty firm if it has its head office in an EEA State other than the United Kingdom. EEA firms and Treaty firms are entitled to exercise both the right of establishment and the freedom to provide services under the Treaty. The difference, however, is that an EEA firm has a right to passport under a Single Market Directive, whereas a Treaty firm carries on activities which do not fall within the scope of a Single Market Directive. An EEA firm may also be a Treaty firm if it carries on such activities. A person may be a Treaty firm, where, for example, it carries on business that:

1. (1)

   comprises regulated activities, such as reinsurance, which are not covered by any Single Market Directives; or

2. (2)

   includes regulated activities which do not fall within the scope of the Single Market Directive under which it is entitled to exercise an EEA right.

An EEA firm may passport those activities which fall within the scope of the relevant Single Market Directive as long as they are included in its Home State authorisation.