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Status: You are viewing the version of the handbook as on 2009-03-31.

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) or the Reinsurance Directive (see SUP 13.6.9B R)8, 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, if the firm is passporting under the Insurance Directives, the relevant EEA details or relevant UK details7.

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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 7the Banking Consolidation Directive and the UCITS Directive.

SUP 13.6.4GRP

If a UK firm has exercised an EEA right, under 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

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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 month7 beginning with the day on which the UK firm gave the Host State regulator the notice in (1) has elapsed.

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7Firms passporting under MiFID

SUP 13.6.5AGRP

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 13.6.5BGRP

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

  1. (1)

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

  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 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 details7, 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

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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 month7 beginning on the day on which the UK firm gave the FSA the notice in (1) has elapsed; and

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  4. (4)

    either:

    1. (a)

      a further period of one month7 has elapsed; or

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    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 relevant UK details7 unless the UK firm has given a notice to the FSA stating the details of the proposed change at least one month7 before the change is effected.

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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 intention7 and not a change to details notice7.

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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 a change to the details of branches notice 7.

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Firms passporting under the Reinsurance Directive

SUP 13.6.9BR

8A UK firm exercising its EEA right under the Reinsurance Directive to establish a branch in another EEA State must notify the FSA of any changes in the information specified in SUP 13 Annex 1 R. Whenever possible, this notification must be made as soon as the change in information is known by the firm.

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 relevant UK details7 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.

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  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 firm7 as a whole and not just the branch7 in the EEA State. 1

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  3. (3)

    Neither this guidance nor that set out at SUP 13.6.4 G or SUP 13.6.5 G is applicable to MiFID investment firms.7

The process

SUP 13.6.11GRP

When the FSA 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)) or a pure reinsurer (see SUP 13.6.9B R) 8it 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 13.6.12GRP

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 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.

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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.

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SUP 13.6.16GRP

7UK firms may wish to use the standard form available from the Passport Notifications Unit (see SUP 13.12 (Sources of further information)) to give the notices to the FSA 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).

7The process: MiFID investment firms

SUP 13.6.17GRP

7When the FSA 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.