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Status: You are viewing the version of the handbook as on 2005-06-30.

SUP 13.6 Changes to branches

SUP 13.6.1GRP

Where a UK firm is exercising an EEA right, other than under the Insurance Mediation Directive (see SUP 13.6.9A G) , 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

SUP 13.6.2GRP

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 relevant details.

SUP 13.6.3GRP

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 firm either by the Host State regulator, or, if the firm is passporting under Insurance Directives, via the FSA authorisations team.

Firms passporting under the Investment Services Directive, the Banking Consolidation Directive and the UCITS Directive.

SUP 13.6.4GRP

If a UK firm has exercised an EEA right, under the Investment Services Directive, the Banking Consolidation Directive 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

SUP 13.6.5GRP

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 FSA and to the Host State regulator stating the details of the proposed change;

  2. (2)

    the FSA has given the Host State regulator a notice informing it of the details of the change; and

  3. (3)

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

Firms passporting under the Insurance Directives

SUP 13.6.6G

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

SUP 13.6.7G

Where the change arises from circumstances within the control of the UK firm, the requirements in regulation 13(2) are that:

  1. (1)

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

  2. (2)

    the FSA has given the Host State regulator a notice informing it of the details of the proposed change;

  3. (3)

    the period of at least one month beginning on the day on which the UK firm gave the FSA the notice in (1) has elapsed; and

  4. (4)

    either:

    1. (a)

      a further period of one month has elapsed; or

    2. (b)

      the FSA has informed the UK firm of any consequential changes in the applicable provisions of which the FSA has been notified by the Host State regulator.

SUP 13.6.8G

If a UK firm has exercised an EEA right under the Insurance Directives and established a branch in another EEA State, regulation 15(1) states that the UK firm cannot make a change in any of the UK relevant details (see SUP 13 Annex 2) unless the UK firm has given a notice to the FSA stating the details of the proposed change at least one month before the change is effected.

SUP 13.6.9G

Where a UK firm with Part IV permission to carry on both long-term and general insurance business, is passporting under the Insurance Directives and wishes to extend its general insurance business to include long term insurance business (or vice versa), it should complete a new notice of intention (see SUP 13.5(Notices of intention) and not a change in requisite details notification.

Firms passporting under the Insurance Mediation Directive5

SUP 13.6.9AGRP

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 requisite details or relevant details. Therefore there are no requisite details or relevant details for changes to a branch established in another EEA State under the Insurance Mediation Directive.

Changes arising from circumstances beyond the control of a UK firm

SUP 13.6.10GRP
  1. (1)

    If the change arises from circumstances beyond the UK firm's control, the UK firm:

    1. (a)

      is required by regulation 11(3) or regulation 13(3) to give a notice to the FSA and to the Host State regulator stating the details of the change as soon as reasonably practicable;

    2. (b)

      may, if it is passporting under the Insurance Directives, make a change to its UK relevant details under regulation 15(1) if it has, as soon as practicable (whether before or after the change), given notice to the FSA stating the details of the change.

  2. (2)

    The FSA 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 firm as a whole and not just the branch in the EEA State. 1

The process

SUP 13.6.11GRP

When the FSA receives a notice from a UK firm (see SUP 13.6.5 G (1) and SUP 13.6.7 G (1)) it is required by regulations 11(4) and 13(4) to either refuse, or consent to the change within a period of one month from the day on which it received the notice.

SUP 13.6.12GRP

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

  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 13.6.13G

If a UK firm is passporting under the Investment Services Directive or Banking Consolidation Directive, then regulation 11(7) states that the FSA may not refuse to consent to a change unless, having regard to the change and to the EEA activities the UK firm is seeking to carry on, it doubts the adequacy of the administrative structure or the financial situation of the UK firm. In reaching its determination, the FSA may have regard to the adequacy of management, systems and the presence of relevant skills needed for the EEA activities to be carried on.

SUP 13.6.14G

If a UK firm is passporting under the Insurance Directives, then regulation 13(7) states that the FSA may not refuse to consent to a change unless, having regard to the change, the FSA has reason:

  1. (1)

    to doubt the adequacy of the UK firm's administrative structure or financial situation; or

  2. (2)

    to question the reputation, qualifications or experience of the directors or managers of the firm or the authorised agent;

in relation to the business conducted, or to be conducted, through the branch.

SUP 13.6.15GRP

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

  1. (1)

    the FSA 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

  2. (2)

    the UK firm may refer the matter to the Tribunal; for details of procedures for a reference to the Tribunal see DEC 5 (References to the Tribunal, publication and service of notices)2.