Related provisions for MIPRU 2.1.2
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1(1) The European Commission has not produced an interpretative communication on MiFID3. It is arguable, however, that the principles in the communication on the Second Banking Directive can be applied to investment services and activities3. This is because Chapter9 II of Title II of MiFID3 (containing provisions relating to operating conditions for investment firms3) also applies to the investment services and activities3 of firms operating under the Banking Consolidation Directive,
The E-Commerce Directive does not affect the responsibilities of Home State under the Single Market Directives. This includes the obligation of a Home State regulator to notify the Host State regulator of a firm's intention to establish a branch in, or provide cross border services into, the other EEA State.
1The Single Market Directives require credit institutions, insurance undertakings (other than reinsurance undertakings)5, MiFID investment firms3, AIFMs, 7UCITS management companies,8insurance intermediaries and MCD credit intermediaries8 to make a notification to the Home State before establishing a branch or providing cross border services.SUP 13.5 (Notices of intention) sets out the notification requirements for a firm seeking to establish a branch or provide cross border services.
In the opinion of the European Commission (and in the wording of the Single Market Directives) "only activities carried on within the territory of another Member State should be the subject of prior notification" (Commission interpretative communication: Freedom to provide services and the interests of the general good in the Second Banking Directive (97/C 209/04)). In determining, for the purposes of notification, whether a service is to be provided 'within' another EEA State,
The key distinction in relation to temporary activities is whether a firm should make its notification under the freedom of establishment in a Host State, or whether it should notify under the freedom to provide services into a Host State. It would be inappropriate to discuss such a complex issue in guidance of this nature. It is recommended that, where a firm is unclear on the distinction, it should seek appropriate advice. In either case, where a firm is carrying on activities
The FCA considers5 that, in order to comply with Principle 3:Management and control (see PRIN 2.1.1 R), a firm should have appropriate procedures to monitor the nature of the services provided to its customers. Where a UK firm has non-resident customers but has not notified the EEA State in which the customers are resident that it wishes to exercise its freedom to provide services, the FCA5 would expect the firm's systems to include appropriate controls. Such controls would
A UK firm17 or an AIFM exercising an EEA right to market an AIF under AIFMD13,9 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 from17AIFMD, MiFID or the UCITS Directive,13paragraph 20(4B) of Part III of Schedule 3 to the Act. If a UK firm derives its EEA right from the MCD, it cannot start providing cross border services
8(2) [deleted]17(2A) 8(a) If the UK firm'sEEA 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 appropriate UK regulator20 to send a copy of the
A UK firm17 cannot establish a branch in another EEA State for the first time under an EEA right unless the relevant13 conditions in paragraphs 19(2), (4) and (5)12 of Part III of Schedule 3 to the Act are satisfied. It is an offence for a UK firm which is not an authorised person to contravene this prohibition (paragraph 21 of Part III of Schedule 3 to the Act). These conditions are that:913121213(1) the UKfirm has given the appropriate UK regulator,20 in accordance with the
(1) 8If the UK firm'sEEA right derives from the CRD12 or10MiFID8,10 the appropriate UK regulator20 will give the Host State regulator a consent notice within three months unless it has reason to doubt the adequacy of a UK firm's resources or its administrative structure.8 The Host State regulator then has a further two months to notify the applicable provisions (if any) and prepare for the supervision, as appropriate, of the UK firm, or in the case of a MiFID investment firm,
(1) 1This chapter applies to an EEA firm that wishes to exercise an entitlement to establish a branch in, or provide cross border services into, the United Kingdom under a Single Market Directive or the auction regulation7. (The Act refers to such an entitlement as an EEA right and its exercise is referred to in the Handbook as "passporting".) (See SUP App 3 (Guidance on passporting issues) for further guidance on passporting.)The chapter does not, apart from in SUP 13A.6G (rules
(1) Under the Gibraltar Order2 made under section 409 of the Act, a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:22(a) [deleted]141212(aA) [deleted]1212(b) authorised in Gibraltar under the CRD8; or282(c) authorised in Gibraltar under the Insurance Mediation Directive; or2(d) authorised in Gibraltar under the MiFID4;9 or114(e) authorised in Gibraltar under the UCITS Directive9; or11(f) authorised in Gibraltar under AIFMD.11(g) authorised in Gibraltar
(1) EEA firms should note that this chapter only addresses the procedures which the appropriate UK regulator16 will follow under the Act.So, an EEA firm should consider this guidance in conjunction with the requirements with which it will have to comply in its Home State. 166(2) The guidance in this chapter represents the appropriate UK regulator's16 interpretation of the Single Market Directives, the auction regulation,7 the Act and the secondary legislation made under the Act.
The following Tables 1, 2, 2ZA,12 2A and 2B1 provide an outline of the regulated activities and specified investments that may be of relevance to firms considering undertaking passported activities under the CRD6, 1MiFID3, AIFMD7, the UCITS Directive, the MCD9 and the Insurance Mediation Directive.1 The tables may be of assistance to UK firms that are thinking of offering financial services in another EEA State and to EEA firms that may offer those services in the United Kin
The tables provide a general indication of the investments and activities specified in the Regulated Activities Order that may correspond to categories provided for in the CRD6, 1MiFID3, AIFMD7, the UCITS Directive, the MCD9 or the Insurance Mediation Directive1. The tables do not provide definitive guidance as to whether a firm is carrying on an activity that is capable of being passported, nor do the tables take account of exceptions that remove the effect of articles. Whether
1This chapter applies to an incoming EEA firm15 which has established a branch in, or is providing cross border services into, the United Kingdom under one of the Single Market Directives or the auction regulation8 and, therefore, qualifies for authorisation under Schedule 3 to the Act. The chapter does not apply to an EEA firm that is a Solvency II firm or to Gibraltar firms treated as such Solvency II firms. Solvency II firms and such Gibraltar firms should consult the relevant
(1) Under the Gibraltar Order4 made under section 409 of the Act, a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:(a) [deleted]151313(aa) [deleted]1313(b) authorised in Gibraltar under the9CRD; or;494(c) authorised in Gibraltar under the Insurance Mediation Directive; or4(d) authorised in Gibraltar under MiFID; or1010(e) authorised in Gibraltar under the UCITS Directive; or1210(f) authorised in Gibraltar under AIFMD.12(g) authorised in Gibraltar
In addition, the chapter does not give guidance on the procedures for making an application for top-up permission, to carry on regulated activities in the United Kingdom which are outside the scope of the Single Market Directives and for which the firm cannot exercise Treaty rights. Incoming EEA firms seeking a top-up permission should refer to 3SUP 13A3.
Section 418 of the Act extends the meaning that 'carry on regulated activity in the United Kingdom' would normally have by setting out additional cases in which a person who would not otherwise be regarded as carrying on the activity in the United Kingdom is to be regarded as doing so. Each of the following cases thus amounts to carrying on a regulated activity in the United Kingdom:(1) where a UK-based person carries on a regulated activity in another EEA State in the exercise
A UK firm should be aware that the guidance is the FCA's5 interpretation of the Single Market Directives, the Act and the legislation made under the Act. The guidance is not exhaustive and is not a substitute for firms consulting the legislation or taking their own legal advice in the United Kingdom and in the relevant EEA States.5
A firm3, other than a sole trader, must allocate the responsibility for the firm'sinsurance mediation activity or MCD credit intermediation activity4 to a director or senior manager.3[Note: Article 3(1), fourth paragraph, of the Insurance Mediation Directive1and article 29(4)(a), first sentence, of the MCD.4]1
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 or the auction regulation2, whereas a Treaty firm carries on activities for which the right to carry on those activities
A UK firm wishing to provide cross border services into a particular EEA State for the first time under an EEA right other than under the auction regulation7 must submit a notice in the form set out in:535(1) SUP 13 Annex 2 R5if the UK firm is passporting under 3MiFID;5 or5133(2) SUP 13 Annex 4 R5if the UK firm is passporting under the 8CRD; or585(3) SUP 13 Annex 5 R5if the UK firm is passporting under the Insurance Mediation Directive5(4) SUP 13 Annex 6 R, if the UK firm is a
A notice of intention3 (other than one to establish a branch or provide services in another EEA state under the auction regulation)7 may include activities within the scope of the relevant Single Market Directive which are not regulated activities (paragraphs 19(3) and 20(2) of Part III of Schedule 3 to the Act), although in the case of a MiFID investment firm a notice of intention may only include ancillary services which are to be carried on with one or more investment services
This chapter applies to a UK firm, that is, a person whose head office is in the United Kingdom and which is entitled to carry on an activity in another EEA State subject to the conditions of a Single Market Directive. Such an entitlement is referred to in the Act as an EEA right and its exercise is referred to in the Handbook as passporting.1
This chapter also applies to a UK firm which wishes to establish a branch in, or provide cross border services into, Gibraltar. The Financial Services and Markets Act 2000 (Gibraltar) Order 2001 provides that a UK firm is to be treated as having an entitlement corresponding to its EEA right, to establish a branch in, or provide cross border services into, Gibraltar under any of the Single Market Directives. So, references in this chapter to an EEA State or an EEA right include
The purpose of this appendix is to give guidance:(1) to UK firms on some of the issues that arise when carrying on passported activities1(see SUP App 3.5and SUP App 3.6);111(2) to all firms on the relationship between regulated activities and activities passported under the Single Market Directives (see SUP App 3.9and SUP App 3.101).11
If an incoming EEA firm, which is aCRD credit institution2, an IMD insurance intermediary, an MCD mortgage credit intermediary3 or MiFID investment firm1, is a participant firm, the FSCS must give the firm such discount (if any) as is appropriate on the share of any levy it would otherwise be required to pay, taking account of the nature of the levy and the extent of the compensation coverage provided by the firm's Home State scheme.21
3The FCA views this cooperation and collaboration as essential to effective regulation of the international market in financial services. It will therefore exercise its own-initiative powers wherever: (1) an EEACompetent authority requests it to do so; and (2) it is satisfied that the use of the power is appropriate (having regard to the considerations set out at paragraphs 8.2.1 to 8.2.6) to enforce effectively the regulatory requirements imposed under the Single Market Directives