SUP 13.3 Establishing a branch in another EEA State

1. (1)

   Guidance on what constitutes a branch is given in SUP App 3.18

2. (2)
   1. (a)

      Where a UK MiFID investment firm is seeking to use a tied agent established in another EEA State in which a branch is already established, the tied agent will be assimilated into the branch.18

   2. (b)

      If a UK MiFID investment firm is seeking to use a tied agent established in another EEA State in which no branch is already established, the rules in SUP 13 will apply as if that firm were seeking to establish a branch in that EEA State (paragraph 20A of Schedule 3 to the Act).18

   3. (c)

      In any event, the appointment of a tied agent established in another EEA State leads to the application of conduct requirements to the tied agent’s business, as if it were a branch of a UK MiFID investment firm.18

   4. (d)

      See SUP 13.3.9G for details of the MiFID branch forms.18

   [Note: article 35(2) of MiFID]18

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:

1. (1)

   the UK firm has given the appropriate UK regulator,20 in accordance with the appropriate UK regulator's20 rules (see SUP 13.5.1 R)12or the directly applicable regulations made under the CRD (see SUP 13.5.1 R)11, notice of its intention to establish a branch (known as a notice of intention8) which:8

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   1. (a)

      identifies the activities which it seeks to carry on through the branch; and

   2. (b)

      includes such other information as may be specified by the appropriate UK regulator20 (see SUP 13.5.1 R)or by the directly applicable regulations made under the CRD (see SUP 13.5.1 R)12;

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2. (2)

   the appropriate UK regulator20 has given notice (known as a consent notice) to the Host State regulator;

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3. (2A)

   if the UK firm's EEA right relates to providing collective portfolio management services under the UCITS Directive13, the FCA20 has provided to the Host State regulator:10

   20
   1. (a)

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

   2. (b)

      a description of the scope of the firm's authorisation; and 10

   3. (c)

      details of any restriction on the types of EEA UCITS scheme that the firm is authorised to manage; and10

4. (3)
   1. (a)

      if the UK firm's EEA right derives from the MCD,19 one month has elapsed beginning on the date on which the UK firm received notice that the appropriate UK regulator20 had given a consent notice8 as described in SUP 13.3.6 G (1)19;

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   2. (aa)

      if the UK firm’s EEA right derives from the IDD, either:19

      1. (i)

         the Host State regulator has notified the appropriate UK regulator of the applicable provisions; or 19

      2. (ii)

         one month has elapsed beginning with the date on which the appropriate UK regulator gave the consent notice as described in SUP 13.3.5G(2);19

   3. (b)

      in any other case (except for a firm passporting under AIFMD)13:4

      1. (i)

         the Host State regulator has notified the UK firm17 of the applicable provisions or, in the case of a UK firm passporting under MiFID or the UCITS Directive,10 that the branch may be established8; or4

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      2. (ii)

         two months have elapsed beginning with the date on which the appropriate UK regulator20 gave the consent notice.41

         20

4An appointed representative appointed by a firm to carry on insurance distribution activity19 on its behalf may establish a branch in another EEA State under the IDD19. In this case, the notice of intention8 in SUP 13.3.2 G (1) should be given to the appropriate UK regulator20 by the firm on behalf of the appointed representative.5

4An exempt professional firm which is included in the record of unauthorised persons carrying on insurance distribution activity19 maintained by the FCA20 under article 93 of the Regulated Activities Order may establish a branch in another EEA State under the IDD19 (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 establish a branch 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.

14If a UK firm is passporting under AIFMD, it may establish a branch in another EEA State as soon as the conditions in SUP 13.3.2 G (1) and SUP 13.3.2 G (2) are met.

1. (1)

   8If the UK firm's EEA 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, to inform the UK firm that a branch can be established.8

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2. (1A)

   If the UK firm's EEA right derives from the UCITS Directive, the FCA20 will give the Host State regulator a consent notice within two months unless it has reason to doubt the adequacy of the UK firm's resources or its administrative structure. The Host State regulator then has a further two months to prepare for the supervision of the UK firm.10

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3. (1B)

   13Where the UK firm's EEA right derives from AIFMD, the FCA will give the Host State regulator a consent notice within two months of having received the notice of intention and immediately inform the UK firm pursuant to SUP 13.3.6 G (1) if the FCA is satisfied that the firm complies, and continues to comply with:

   1. (a)

      the provisions implementing the AIFMD; and

   2. (b)

      any directly applicable EU regulation made under that directive.

4. (2)

   If the UK firm's EEA right derives from the IDD19, the appropriate UK regulator20 will give the Host State regulator a consent notice within one month of the date on which it received the UK firm's notice of intention unless it has reason to doubt the adequacy of the UK firm’s resources or its administrative structure. The Host State regulator then has a further one month to notify the applicable provisions.19

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5. (3)

   If the UK firm's EEA right derives from the MCD, the FCA will give the Host State regulator a consent notice within one month of the date on which it received the UK firm's notice of intention. The Host State regulator then has a further two months to prepare for the supervision of the UK firm.16

20Where the PRA is the appropriate UK regulator, it will consult the FCA before deciding whether to give a consent notice, except where paragraph 19(7A) of Part III of Schedule 3 to the Act applies. Where the FCA is the appropriate UK regulator, it will consult the PRA before deciding whether to give a consent notice in relation to a UK firm whose immediate group includes a PRA-authorised person.

1. (1)

   Save where (1A) applies, if19 the appropriate UK regulator20 gives a consent notice, it will inform the UK firm in writing that it has done so.

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2. (1A)

   If the UK firm’s EEA right derives from the IDD, where the appropriate UK regulator has given a consent notice and the Host State regulator has acknowledged receipt of that notice, the appropriate UK regulator must give written notice to the UK firm concerned that the Host State regulator has received the consent notice.19

3. (2)

   The consent notice will contain, among other matters, the requisite details17 (see SUP 13 Annex 18) provided by the UK firm in its notice of intention8 (see SUP 13.5 (Notices of intention)).

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4. (3)

   10Where a consent notice is given under the UCITS Directive, the FCA20 will at the same time:

   20
   1. (a)

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

   2. (b)

      enclose the information described at SUP 13.3.2 G (2A).

5. (4)

   13Where a consent notice is given under the AIFMD it must include confirmation that the UK firm has been authorised by the FCA under AIFMD.

6. (5)

   Where a consent notice is given under the MCD in relation to a tied MCD credit intermediary, it will include details of:16

   1. (a)

      any MCD creditor or group to which it is tied; and

   2. (b)

      whether the MCD creditor or group take full and unconditional responsibility for the tied MCD credit intermediary's activities.

7. (6)

   Where a consent notice is given under the IDD, it will include the following information:19

   1. (a)

      the name, address and, where applicable, the registration number of the insurance intermediary;19

   2. (b)

      the EEA State within the territory of which the insurance intermediary plans to establish a branch;19

   3. (c)

      the category of insurance intermediary and, if applicable, the name of the insurer represented;19

   4. (d)

      the relevant classes of insurance, if applicable;19

   5. (e)

      the address within the Host State from which documents may be obtained; and19

   6. (f)

      the name of any person responsible for the management of the branch.19

1. (1)

   If the appropriate UK regulator20 proposes to refuse to give a consent notice, then paragraph 19(8) of Part III of Schedule 3 to the Act requires the appropriate UK regulator20 to give the UK firm a warning notice.

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2. (2)

   If the appropriate UK regulator20 decides to refuse to give a consent notice, then paragraph 19(12) of Part III of Schedule 3 to the Act requires the appropriate UK regulator20 to give the UK firm a decision notice within three months8 of the date on which it received the UK firm's notice of intention8(two months8 in the case of a UK firm which is a UCITS management company or an AIFM and one month in the case of a UK firm which is an insurance intermediary19). The UK firm may refer the matter to the Tribunal.

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3. (3)

   [deleted]20

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20For details of the FCA's procedures for the giving of warning notices or decision notices see DEPP 2 (Statutory notices and the allocation of decision making).

10A UK firm seeking to provide collective portfolio management services from a branch in another EEA State, 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.

1. (1)
   1. (a)

      18A UK MiFID investment firm wishing to use a tied agent established in another EEA State is required to complete the form in Annex VII of MiFID ITS 4A and send it to the FCA.

      [Note: article 14(1) of MiFID ITS 4A]

   2. (b)

      A UK MiFID investment firm which intends to establish a branch in another EEA State is required to complete the form in Annex VI of MiFID ITS 4A and send it to the FCA.

      [Note: article 13(1) of MiFID ITS 4A]

   3. (c)

      A UK MiFID investment firm that intends to establish a branch which in turn intends to use tied agents is required to complete the forms in Annex VI and Annex VII of MiFID ITS 4A and send them to the FCA.

      [Note: article 13(2) of MiFID ITS 4A]

2. (2)
   1. (a)

      Each of the forms in MiFID ITS 4A referred to in SUP 13.3.9G(1)(a) to (c) is replicated in SUP 13 Annex 1AR.

   2. (b)

      These versions should be used for the purposes of notifications to the FCA.

   3. (c)

      The forms should be submitted in accordance with SUP 13.5.3R.