SUP 13.4 Providing cross border services into another EEA State

Guidance on where a cross border service is provided is given in SUP App 36.41

A UK firm, other than a UK pure reinsurer,9 cannot start providing cross border services into another EEA State under an EEA right unless it satisfies the conditions in paragraphs 20(1) of Part III of Schedule 3 to the Act and, if it derives its EEA right from the Insurance Directives, paragraph 20(4B) of Part III of Schedule 3 to the Act. It is an offence for a UK firm which is not an authorised person to breach this prohibition (paragraph 21 of Part III of Schedule 3 to the Act).The conditions are that:

1. (1)

   the UK firm has given the FSA, in the way specified by FSA rules (see SUP 13.5.2 R), notice of its intention to provide cross border services (known as a notice of intention8) which:

   8
   1. (a)

      identifies the activities which it seeks to carry on by way of provision of cross border services; and

   2. (b)

      includes such other information as may be specified by the FSA (see SUP 13.5.2 R); and

2. (2)

   if the UK firm is passporting under the Insurance Directives, the firm has received written notice from the FSA as described in SUP 13.4.6 G; or4

3. (3)

   if the UK firm is passporting under the Insurance Mediation Directive and the EEA State in which the UK firm is seeking to provide services has notified the European Commission of its wish to be informed of the intention of persons to provide cross border services in its territory in accordance with article 6(2) of that directive, one month has elapsed beginning with the date on which the UK firm received written notice from the FSA as described in SUP 13.4.5 G (paragraph 20 (3B)(c) of Schedule 3 to the Act).4

4An appointed representative appointed by a firm to carry on insurance mediation activity on its behalf may provide cross border services in another EEA State under the Insurance Mediation Directive. In this case, the notice of intention8 in SUP 13.4.2 G (1) should be given to the FSA by the firm on behalf of the appointed representative5.

4An exempt professional firm which is included in the record of unauthorised persons carrying on insurance mediation activity maintained by the FSA under article 93 of the Regulated Activities Order may provide cross border services in another EEA State under the Insurance Mediation Directive (see PROF 7.2).

8A tied agent appointed by a MiFID investment firm to carry on investment services and activities (and ancillary services where relevant) does not have its own passporting right to provide cross border services in another EEA State. However, a MiFID investment firm remains free to appoint a tied agent to do business in another EEA State and where it does so, the tied agent will benefit from its passport.

8A MiFID investment firm that wishes to obtain a passport for the activity of operating an MTF should follow the procedures described in this chapter. A UK market operator that operates a recognised investment exchange or an MTF and wishes to provide cross border services into another EEA State should follow the procedure described in REC 4.2B.

9SUP 13.4.2 G does not apply to UK pure reinsurers as they have automatic passport rights on the basis of their Home State authorisation under the Reinsurance Directive. No notification is required from UK pure reinsurers in respect of the provision of cross border services.

1. (1)

   If8 the UK firm's EEA right derives from MiFID8, the Banking Consolidation Directive or the UCITS Directive, paragraph 20(3) of Part III of Schedule 3 to the Act requires the FSA to send a copy of the notice of intention8 to the Host State Regulator within one month8 of receipt.8A UK firm passporting under the Banking Consolidation Directive10 may start providing cross border services as soon as it satisfies the relevant conditions (see SUP 13.4.2 G).8

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2. (2)
   1. (a)

      If8 the UK firm's EEA right derives from theInsurance Directives, paragraph 20(3A) of Part III of Schedule 3 to the Act requires the FSA, within one month8 of receiving the notice of intention8, to:

      888
      1. (i)

         give notice in a specified form (known as a consent notice) to the Host State regulator; or

      2. (ii)

         give written notice to the UK firm of its refusal to give a consent notice and the reasons for that refusal.

   2. (b)

      The issue or refusal of a consent notice under paragraph 20(3A) of Part III of Schedule 3 to the Act is the consequence of a regulatory decision, and this consent notice (unlike the consent notice for establishment of a branch) is not a statutory notice as set out in section 395 of the Act. A UK firm that receives notice that the FSA refuses to give a consent notice may refer the matter to the Tribunal under paragraph 20(4A) of Part III of Schedule 3 to the Act.8

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   3. (c)

      If the FSA has required of a UK firm a financial recovery plan of the kind mentioned in paragraph 1 of article 38 of the Consolidated Life Directive or paragraph 1 of article 20a of the First Non-Life Directive, the FSA will not give a consent notice for so long as it considers that policyholders' rights are threatened within the meaning of those provisions.8

3. (2A) 8
   1. (a)

      If the UK firm's EEA right derives from the Insurance Mediation Directive, and the EEA State in which the UK firm is seeking to provide services has notified the European Commission of its wish to be informed of the intention of persons to provide cross border services in its territory in accordance with article 6(2) of that directive, paragraph 20(3B)(a) of Part III of Schedule 3 to the Act requires the FSA to send a copy of the notice of intention to the Host State regulator within one month of receipt. Otherwise, the UK firm may start providing cross border services as soon as it satisfies the relevant conditions (see SUP 13.4.2 G).8

   2. (b)

      The list of the EEA States that have notified the European Commission of their wish to be informed in accordance with article 6(2) of the Insurance Mediation Directive is published on the FSA's website at www.fsa.gov.uk.8

4. (2B)

   Where a consent notice is given under the UCITS Directive, the FSA will at the same time:10

   1. (a)

      communicate to the Host State regulator details of the compensation scheme intended to protect investors; and10

   2. (b)

      provide to the Host State regulator:10

      1. (i)

         confirmation that the firm has been authorised as a management company under the provisions of the UCITS Directive;10

      2. (ii)

         a description of the scope of the firm's authorisation; and

      3. (iii)

         details of any restriction on the types of EEA UCITS scheme that the firm is authorised to manage.

When the FSA sends a copy of a notice of intention8, or if it gives a consent notice to the Host State regulator, it must inform the UK firm in writing that it has done so (paragraphs 20 (3B)(b) and (4) of Schedule 3 to the Act).4

1. (1)

   [deleted]10

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2. (2)

   If the UK firm is passporting under the Insurance Directives, then the Host State regulator may notify the FSA if there are any applicable provisions If so, the FSA will inform the UK firm of the applicable provisions.

3. (3)

   If a UK firm is not notified of the applicable provisions, it should, for its own protection, take all reasonable steps to determine the applicable provisions for itself.2

10A UK firm seeking to provide collective portfolio management services in another EEA State under the freedom to provide cross border services, is advised that it will need to refer to the rules of the competent authority of the UCITS Home State implementing article 20 of the UCITS Directive which will require it to submit to that competent authority information relating to its depositary agreement and certain delegation arrangements.