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SUP 13.6 Changes to branches

SUP 13.6.1G

Where a UK firm is exercising an EEA right, other than under the Insurance Mediation Directive (see SUP 13.6.9A G)14 or the CRD9, and has established a branch in another EEA State, any changes to the details of the branch are governed by the EEA Passport Rights Regulations. References to regulations in this section are to the EEA Passport Rights Regulations. A UK firm which is not an authorised person should note that, under regulation 18, contravention of the prohibition imposed by regulation 11(1), 13(1) or 15(1) is an offence. It is a defence, however, for the UK firm to show that it took all reasonable precautions and exercised due diligence to avoid committing the offence.5

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SUP 13.6.2G

UK firms should note that if a branch in another EEA State ceases to provide services, this may represent a change in requisite details or, if the firm is passporting under the Solvency II Directive,12 the relevant EEA details or relevant UK details7.

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SUP 13.6.3G

UK firms should also note that changes to the details of branches may lead to changes to the applicable provisions to which the UK firm is subject. These changes should be communicated to the UK firm14 by the Host State regulator14.

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Firms passporting under CRD and the UCITS Directive.9

SUP 13.6.4G

If a UK firm has exercised an EEA right, under the CRD9 or the UCITS Directive, and established a branch in another EEA State, regulation 11(1) states that the UK firm must not make a change in the requisite details of the branch (see SUP 13 Annex 1), unless it has satisfied the requirements of regulation 11(2), or, where the change arises from circumstances beyond the UK firm's control, regulation 11(3) (see SUP 13.6.10 G).4

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SUP 13.6.5G

Where the change arises from circumstances within the control of the UK firm, the requirements in regulation 11(2) are that:

  1. (1)

    the UK firm has given notice to the appropriate UK regulator15 and to the Host State regulator stating the details of the proposed change;

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  2. (2)

    the appropriate UK regulator15 has given the Host State regulator a notice informing it of the details of the change; and

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  3. (3)

    either the Host State regulator has informed the UK firm that it may make the change, or the period of one month7 beginning with the day on which the UK firm gave the Host State regulator the notice in (1) has elapsed.

    7

7Firms passporting under MiFID

SUP 13.6.5AG

7If a UK firm has exercised an EEA right to establish a branch under MiFID, it must not make a change in the requisite details of the branch (see SUP 13 Annex 1), use, for the first time, a tied agent established in the EEA State in which the branch is established, or cease to use a tied agent established in the EEA State in which the branch is established, unless it has satisfied the requirements of regulation 11A(2) (see SUP 13.6.5B G).

SUP 13.6.5BG

7The requirements of regulation 11A(2) are that:

  1. (1)

    the UK firm has given a notice to the appropriate UK regulator15 stating the details of the proposed change; and

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  2. (2)

    the period of one month beginning with the day on which the UK firm gave the notice has elapsed.

Firms passporting under the Insurance Mediation Directive5

SUP 13.6.9AG

5A UK firm exercising its EEA right under the Insurance Mediation Directive to establish a branch in another EEA State is not required to supply a change to the details of branches notice 7.

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Firms passporting under AIFMD11

SUP 13.6.9CG
  1. (1)

    11If a UK firm has exercised an EEA right under AIFMD and established a branch in another EEA State, the UK firm must not make a material change in the requisite details of the branch or the identity of the AIFs it manages in the EEA State in which it has established a branch (see SUP 13 Annex 1), unless:

    1. (a)

      it has complied with regulation 17A(4) for a planned change; or

    2. (b)

      it has complied with regulation 17A(5) for a unplanned change.

  2. (2)

    The requirements in regulation 17A(4) for a planned change are that:

    1. (a)

      the UK firm has given notice to the FCA stating the details of the proposed change; and

    2. (b)

      either the FCA:

      1. (i)

        has consented to the change; or

      2. (ii)

        has not objected to the change in the period of one month beginning on the day on which the UK firm gave notice.

  3. (3)

    The requirements in regulation 17A(5) for an unplanned change are that:

    1. (a)

      the UK firm has given notice to the FCA immediately after an unplanned change has occurred; and

    2. (b)

      the FCA has consented to the change.

Firms passporting under the MCD

SUP 13.6.9DG
  1. (1)

    13A UK firm which has exercised an EEA right deriving from the MCD to establish a branch, must not make any material changes to the requisite details of the branch unless it has complied with the requirements in regulation 17(B)(2).

  2. (2)

    The requirements in regulation 17(B)(2) are that

    1. (a)

      the UK firm has given notice to the FCA stating the details of the proposed change; and

    2. (b)

      the period of one month beginning with the day on which the UK firm gave notice has elapsed.

  3. (3)

    Paragraph (1) does not apply to changes occasioned by circumstances beyond the control of the UK firm.

Changes arising from circumstances beyond the control of a UK firm

SUP 13.6.10G
  1. (1)

    If the change arises from circumstances beyond the UK firm's control, the UK firm is required by regulation 11(3) or regulation 13(3) to give a notice to the appropriate UK regulator15 and to the Host State regulator stating the details of the change as soon as reasonably practicable;14

  2. (2)

    The appropriate UK regulator15 believes that for a change to arise from circumstances beyond the control of a UK firm, the circumstances should be outside the control of the firm7 as a whole and not just the branch7 in the EEA State. 1

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  3. (3)

    This10 guidance is not10 applicable to MiFID investment firms, firms passporting under the MCD13 or AIFMs10.7

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The process

SUP 13.6.11G

When the appropriate UK regulator15 receives a notice from a UK firm other than a MiFID investment firm 7(see SUP 13.6.5 G (1) and SUP 13.6.7 G (1))14, a UK firm exercising an EEA right under the MCD (see (SUP 13.6.9D G)13 or an AIFM (see SUP 13.6.9C G)10it is required by regulations 11(4) and 13(4) to either refuse, or consent to the change within a period of one month7 from the day on which it received the notice.

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SUP 13.6.12G

If the appropriate UK regulator15 consents to the change, then under regulations 11(5) and 13(5) it will:

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  1. (1)

    give a notice to the Host State regulator informing it of the details of the change; and

  2. (2)

    inform the UK firm that it has given the notice, stating the date on which it did so.

SUP 13.6.12AG

15Where the PRA is the appropriate UK regulator, it will consult the FCA before deciding whether to give consent to a change (or proposed change) and where the FCA is the appropriate UK regulator, it will consult the PRA before deciding whether to give consent in relation to a UK firm whose immediate group includes a PRA-authorised person.

SUP 13.6.15G

If the appropriate UK regulator15 refuses to consent to a change, then under regulations 11(6) and 13(6):

15
  1. (1)

    the appropriate UK regulator15 will give notice of the refusal to the UK firm, stating its reasons and giving an indication of the UK firm's right to refer the matter to the Tribunal and the procedures on such a reference; and

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  2. (2)

    the UK firm may refer the matter to the Tribunal.

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SUP 13.6.16G

7Standard forms are15 available from the FCA and PRA authorisations teams15 (see SUP 13.12 (Sources of further information)) to give the notices to the appropriate UK regulator15 described in SUP 13.6.5 G (1), SUP 13.6.5B G, SUP 13.6.7 G (1), SUP 13.6.8 G and SUP 13.6.10 G (1).

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7The process: MiFID investment firms

SUP 13.6.17G

7When the appropriate UK regulator15 receives a notice from a UK MiFID investment firm (see SUP 13.6.5BG (1)), it is required by regulation 11A(3) to inform the relevant Host State regulator of the proposed change as soon as reasonably practicable. The firm in question may make the change once the period of one month beginning with the day on which it gave notice has elapsed.

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The process: AIFMs11

SUP 13.6.18G
  1. (1)

    11When the FCA receives a notice from an AIFM (see SUP 13.6.9C G) for a planned change and such change means the AIFM no longer complies with AIFMD, the FCA must inform the AIFM without undue delay that:

    1. (a)

      the FCA objects to the change, including reasons for its decision; and

    2. (b)

      the AIFM must not implement the change.

    In these circumstances the AIFM may refer the matter to the Tribunal.

  2. (2)

    If a planned change is implemented or an unplanned change takes place and results in the AIFM no longer complying with an implementing provision of AIFMD, the FCA must:

    1. (a)

      take steps to ensure that the AIFM complies with that provision or ceases to exercise the EEA right; and

    2. (b)

      give notice to the AIFM with reasons for taking such steps.

    In these circumstances, the AIFM may refer the matter to the Tribunal.

  3. (3)

    If a planned change is implemented or an unplanned change takes place and results in no change to the AIFM's compliance with an implementing provision, the FCA must:

    1. (a)

      give a notice to the Host State regulator informing it of the change; and

    2. (b)

      inform the firm that it has given the notice, stating the date on which it did so.

The process: MCD

SUP 13.6.19G

13When the FCA receives a notice from a UK firm exercising an EEA right under the MCD it will, under regulation 17(B)(3), inform the relevant Host State regulator of the proposed change as soon as reasonably practicable. The UK firm in question may make the change once a period of one month has elapsed beginning with the day on which it gave notice.