Where a UK firm12 is exercising an EEA right under the UCITS Directive, MiFID,12 the MCD11 or AIFMD8 and is providing cross border services into another EEA State, any changes to the details of the services 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 contravention of the prohibition imposed by regulation 12(1), 12A(1)5 or 16(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.31058851010
If a UK firm is passporting under the UCITS Directive, regulation 12(1) states that the UK firm must not make a change in its programme of operations, or the activities to be carried on under its EEA right, unless the relevant requirements in regulation 12(2) have been complied with. These requirements are:5
- (1) 13
if the change arises as a result of circumstances beyond the UK firm's control, the UK firm has as soon as practicable (whether before or after the change) given a notice to the FCA13 and to the Host State regulator, stating the details of the change.213
5If a UK firm is providing cross border services in a particular EEA State in exercise of an EEA right deriving from MiFID, the UK firm must comply with the requirements of regulation 12A(2) before it makes a change to its programme of operations, including:
5For further details on giving the notices to the appropriate UK regulator, as described in SUP 13.7.3 G (1), SUP 13.7.3AG and SUP 13.7.3BG12, UK firms may wish to use the standard electronic13 form available from the FCA and PRA authorisation teams 13(see SUP 13.12 (Sources of further information)).13131351313
13Where 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.
the programme of operations, or the EEA activities, to be carried out in exercise of that right; or
9If a UK firm has exercised an EEA right deriving from AIFMD to provide cross-border services to market an AIF, regulation 17A(3) states that it must not make a material change to any of the following:
the AIF rules or instruments of incorporation;
the description of, or information on, the AIF available to investors;
information about arrangements made for the marketing of the AIF and, where relevant, arrangements to prevent the AIF from being marketed to an investor that is a retail client, including where the AIFM relies on the activities of independent entities to provide investment services for the AIF;
11A UK firm which has exercised an EEA right deriving from the MCD to provide a cross border service, must not make any material changes to the service unless it has complied with the requirements in regulation 17(B)(2).
The requirements in regulation 17(B)(2) are that;
Paragraph (1) does not apply to a changes occasioned by circumstances beyond the control of the UK firm.