SUP 13.6 Changes to branches

1. (1)

   Where a UK firm is exercising an EEA right, other than under 16the CRD, 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.15

2. (2)

   References to regulations in this section are to the EEA Passport Rights Regulations.15

3. (3)
   1. (a)

      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.15

   2. (b)

      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.15

4. (4)

   Where a UK MiFID investment firm exercises an EEA right under MiFID and has established a branch in another EEA State, any changes to the details of the branch are also governed by MiFID RTS 3A and MiFID ITS 4A. 15

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.

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.

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

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 regulator17 and to the Host State regulator stating the details of the proposed change;

   17
2. (2)

   the appropriate UK regulator17 has given the Host State regulator a notice informing it of the details of the change; and

   17
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

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 1AR15), 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).

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

1. (1)

   the UK firm has given a notice to the appropriate UK regulator17 stating the details of the proposed change; and

   17
2. (2)

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

15A UK MiFID investment firm is also required to notify the FCA of changes to a branch or tied agent in accordance with:

1. (1)

   article 7 (Information to be notified concerning the change of branch or tied agent particulars) of MiFID RTS 3A;

2. (2)

   article 18 (submission of the change of branch particulars notification) of MiFID ITS 4A; and

3. (3)

   article 19 (submission of the change of the tied agent particulars notification) of MiFID ITS 4A.

15If any of the details in a branch passport notification change, a UK MiFID investment firm is required to notify the FCA by completing the form in Annex VI of MiFID ITS 4A.

[Note: article 18(1) of MiFID ITS 4A]

15If any of the details in a tied agent passport notification change, a UK MiFID investment firm is required to notify the FCA, by completing the form in Annex VII of MiFID ITS 4A.

[Note: article 19(1) of MiFID ITS 4A]

15If a UK MiFID investment firm closes a branch or stops using a tied agent, it is required to notify the FCA using the form in Annex X of MiFID ITS 4A.

[Note: articles 18(4) and 19(4) of MiFID ITS 4A]

1. (1)

   15Each of the forms in MiFID ITS 4A referred to in SUP 13.6.5DG to SUP 13.6.5FG is replicated in SUP 13 Annex 1AR.

2. (2)

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

3. (3)

   The forms should be submitted in accordance with SUP 13.8.1R.

1. (1)

   If a UK firm has exercised an EEA right under the IDD and established a branch in another EEA State, the UK firm must not make any material change to the relevant details of the branch (see SUP 13 Annex 1R), unless it has satisfied the requirements in regulation 17(C)(2).16

2. (2)

   The requirements in regulation 17(C)(2) are that:16

   1. (a)

      the UK firm has given a notice to the appropriate UK regulator stating the details of the proposed change; and16

   2. (b)

      the period of one month, beginning with the date on which the UK firm gave the notice, has elapsed.16

1. (1)

   11If a UKfirm has exercised an EEA right under AIFMD and established a branch in another EEA State, the UKfirm 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 UKfirm 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 UKfirm gave notice.

3. (3)

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

   1. (a)

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

   2. (b)

      the FCA has consented to the change.

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.

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 regulator17 and to the Host State regulator stating the details of the change as soon as reasonably practicable;14

2. (2)

   The appropriate UK regulator17 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)

   This10guidance is not10 applicable to MiFID investment firms, firms passporting under the MCD13 or IDD16 or AIFMs10.7

   1010

When the appropriate UK regulator17 receives a notice from a UK firm other than a MiFID investment firm7(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), a UK firm exercising an EEA right under the IDD (see SUP 13.6.9AG)16 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.

If the appropriate UK regulator17 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.

17Where 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.

If the appropriate UK regulator17 refuses to consent to a change, then under regulations 11(6) and 13(6):

1. (1)

   the appropriate UK regulator17 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

   17
2. (2)

   the UK firm may refer the matter to the Tribunal.

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7Standard forms are17 available from the FCA and PRA authorisations teams17 (see SUP 13.12 (Sources of further information)) to give the notices to the appropriate UK regulator17 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).

1. (1)

   When the FCA15 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.15

2. (2)

   The FCA is required to use the forms in Annex XI, Annex XII or Annex XIII of MiFID ITS 4A, as applicable.15

3. (3)

   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.15

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.

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.

1. (1)

   16When the appropriate UK regulator receives a notice from a UK firm exercising an EEA right under the IDD it will, under regulation 17(C)(3), inform the Host State regulator of the proposed change as soon as reasonably practicable, and in any event, within one month of receiving the notice from the UK firm.

2. (2)

   The UK firm may make the change once a period of one month has elapsed beginning with the day on which it gave notice.