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SUP 14.1 Application and purpose

Application

SUP 14.1.1 G

1This chapter applies to an incoming EEA firm15 which has established a branch in, or is providing cross border services into, the United Kingdom under one of the Single Market Directives or the auction regulation8 and, therefore, qualifies for authorisation under Schedule 3 to the Act. The chapter does not apply to an EEA firm that is a Solvency II firm or to Gibraltar firms treated as such Solvency II firms. Solvency II firms and such Gibraltar firms should consult the relevant parts of the PRA Rulebook and the PRA website at: http://www.bankofengland.co.uk/pra/Pages/authorisations/passporting/notifying.aspx as the PRA is the appropriate UK regulator.15

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SUP 14.1.1A G

8The guidance in SUP 14.2 and SUP 14.3 covers the EEA Passport Rights Regulations. It is not, however, relevant to an EEA firm exercising an EEA right under the auction regulation, except for SUP 14.2.14 R which applies a separate notification requirement. Additionally, where an EEA firm is carrying on MiFID business bidding, that firm is exercising an EEA right under MiFID and so this chapter applies to that activity because it is MiFID business.

SUP 14.1.2 G

SUP 14.6 (Cancelling qualification for authorisation), which sets out how to cancel qualification for authorisation under the Act, also applies to:

  1. (1)

    an incoming Treaty firm that qualifies for authorisation under Schedule 4 to the Act; and

  2. (2)

    a UCITS qualifier that is an authorised person under Schedule 5 to the Act; a UCITS qualifier should, however, refer to COLLG 3.1.11 G6 for full details of applicable rules and guidance.2

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SUP 14.1.3 G
  1. (1)

    Under the Gibraltar Order4 made under section 409 of the Act, a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:

    1. (a)

      [deleted]15

      1313
    2. (aa)

      [deleted]13

      13
    3. (b)

      authorised in Gibraltar under the9CRD; or;4

      94
    4. (c)

      authorised in Gibraltar under the Insurance Mediation Directive; or4

    5. (d)

      authorised in Gibraltar under MiFID; or10

      10
    6. (e)

      authorised in Gibraltar under the UCITS Directive; or1210

    7. (f)

      authorised in Gibraltar under AIFMD.12

    8. (g)

      authorised in Gibraltar under the MCD14

  2. (1A)

    4Similarly, an EEA firm which:

    1. (a)

      has satisfied the Gibraltar establishment conditions and has established a branch in the UK; or

    2. (b)

      has satisfied the Gibraltar service conditions and is providing cross border services into the UK;

    is treated as having satisfied the establishment conditions or service conditions (as appropriate) under Schedule 3 to the Act.

  3. (2)

    Credit institutions15, insurance intermediaries11, investment firms4,12management companies11,14AIFMs12 and MCD credit intermediaries14 are4 allowed to passport their4 services into the United Kingdom if they comply 4with the relevant notification procedures. So, any references in SUP 14 to EEA State or EEA right include references to Gibraltar and the entitlement under the Gibraltar Order where appropriate.4

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Purpose

SUP 14.1.4 G

This chapter gives guidance on the Act and the EEA Passport Rights Regulations made under the Act, for an incoming EEA firm which has established a branch in, or is providing cross border services into, the United Kingdom and wishes to change the details of the branch or cross border services.

[Note: An EEA bank is required to comply with the requirements set out in the directly applicable regulations adopted under Articles 35, 36 and 39 CRD.] 9

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SUP 14.1.5 G

This chapter also explains how an incoming EEA firm, an incoming Treaty firm or a UCITS qualifier may cancel its qualification for authorisation under the Act.

SUP 14.1.6 G

This chapter does not, however, give guidance on the procedures for the establishment of a branch in, or the providing of cross border services into, the United Kingdom for the first time. So, an incoming EEA firm that wishes to change or supplement the nature of its operations in the United Kingdom from the providing of cross border services to the establishment of a branch (or vice versa) should refer to 3SUP 13A3 (Qualifying for authorisation under the Act).

SUP 14.1.7 G

In addition, the chapter does not give guidance on the procedures for making an application for top-up permission, to carry on regulated activities in the United Kingdom which are outside the scope of the Single Market Directives and for which the firm cannot exercise Treaty rights. Incoming EEA firms seeking a top-up permission should refer to 3SUP 13A3.

SUP 14.1.8 G

16The FCA and PRA will share with each other relevant information received, as necessary, in order to perform their respective functions.

SUP 14.2 Changes to branch details

SUP 14.2.1 G

Where an incoming EEA firm is exercising an EEA right, other than under the Insurance Mediation Directive, and has established a branch in the United Kingdom, the EEA Passport Rights Regulations govern any changes to the details of that branch. Where an incoming EEA firm has complied with the relevant requirements in the EEA Passport Rights Regulations, then the firm'spermission given under Schedule 3 to the Act is to be treated as varied accordingly. All references to regulations in SUP 14 are to the EEA Passport Rights Regulations.42

6Firms passporting under the CRD and the UCITS Directive9

SUP 14.2.2 G
  1. (1)

    Where an incoming EEA firm passporting under the CRD9or the UCITS Directive has established a branch in the United Kingdom, regulation 4 states that it must not make a change in the requisite details of the branch unless it has complied with the relevant requirements.

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  2. (2)

    The relevant requirements are set out in regulation 4(4) or, where the change arises from circumstances beyond the incoming EEA firm's control, in regulation 4(5) (see SUP 14.2.8 G).32

SUP 14.2.3 G

Where the change arises from circumstances within the control of the incoming EEA firm, the requirements in regulation 4(4) are that:

  1. (1)

    the incoming EEA firm has given notice to the appropriate UK regulator11 (see SUP 14.4.1 G) and to its Home State regulator stating the details of the proposed change;

    11
  2. (2)

    the appropriate UK regulator11 has received a notice stating those details; and

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  3. (3)

    either:

    1. (a)

      the appropriate UK regulator11 has informed the firm that it may make the change; or

      11
    2. (b)

      the period of one month beginning with the date on which the incoming EEA firm gave the appropriate UK regulator11 the notice mentioned in (1) has elapsed.

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SUP 14.2.4 G

Changes to the requisite details may lead to changes to the applicable provisions to which the incoming EEA firm is subject. The appropriate UK regulator11 will, as soon as practicable after receiving a notice in SUP 14.2.3 G or SUP 14.2.8 G, inform the incoming EEA firm of any consequential changes in the applicable provisions (regulation 4(6)).1

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Changes arising from circumstances beyond the control of an incoming EEA firm passporting under the CRD or UCITS Directive69

SUP 14.2.8 G

If the change arises from circumstances beyond the incoming EEA firm's control, the firm is required by regulation 4(5) (see SUP 14.2.2 G) or regulation 6(5) (see SUP 14.2.5 G (2)) to give a notice to the appropriate UK regulator11 (see SUP 14.4.1 G) and to its Home State regulator stating the details of the change as soon as reasonably practicable.

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SUP 14.2.9 G

The appropriate UK regulator11 believes that for a change to arise from circumstances beyond the control of an incoming EEA firm, the circumstances should be outside the control of the firm as a whole and not just its UK branch. For example, the appropriate UK regulator11 considers that this provision would be unlikely to apply to circumstances in which lack of planning at the incoming EEA firm's head office resulted in a problem arising in a UKbranch which was outside its control. In practice, therefore, use of this provision is likely to be rare.

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Firms passporting under MiFID

SUP 14.2.10 G

6Where an EEA MiFID investment firm has established a branch in the UK, regulation 4A states that it must not:7

  1. (1)

    make a change in the requisite details of the branch; or7

  2. (2)

    use, for the first time, any tied agent established in the United Kingdom; or7

  3. (3)

    cease to use tied agents established in the United Kingdom;7

unless it has complied with the relevant requirements in regulation 4A(3).7

SUP 14.2.11 G

6The relevant requirements in regulation 4A(3) are that:

  1. (1)

    the EEA MiFID investment firm has given notice to its Home State regulator stating the details of the proposed change; and

  2. (2)

    the period of one month beginning with the date on which the EEA MiFID investment firm gave the notice mentioned in (1) has elapsed.

SUP 14.2.12 G

6Changes to the requisite details may lead to changes to the applicable provisions to which the EEA MiFID investment firm is subject. The appropriate UK regulator11 will, as soon as practicable after receiving a notice in SUP 14.2.11 G inform the EEA MiFID investment firm of any consequential changes in the applicable provisions.

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SUP 14.2.13 G

7 SUP 14.2.10 G does not apply to a change occasioned by circumstances beyond the incoming EEA firm's control.

Firms passporting under the auction regulation

SUP 14.2.14 R

8An EEA firm that is exercising an EEA right to provide auction regulation bidding from a branch in the United Kingdom must notify the FSA of any change to the information submitted under SUP 13A.4.5 R by email to emissionstrading@fsa.gov.uk prior to the change or whenever possible thereafter.

Firms passporting under AIFMD

SUP 14.2.15 G

Where an EEA AIFM has established a branch in the UK, it must not make a material change to:

  1. (1)

    the requisite details of the branch; or

  2. (2)

    the identity of the AIFs that the EEA AIFM intends to manage;

unless it has complied with the relevant requirement in regulation 7A(3).

SUP 14.2.16 G

The relevant requirement in regulation 7A(3) is that the Home State regulator has informed the FCA that it has approved the proposed change.

Firms passporting under the MCD

SUP 14.2.17 G

10As required by regulation 7B(1), where an incoming EEA firm passporting under the MCD has established a branch in the UK, it must not make a material change to any of the matters referred to in regulation 2(8)(b) to (e) or regulation 3(6)(b) to (e), unless it has complied with the relevant requirements.

SUP 14.2.18 G

10The relevant requirements are set out in regulation 7B(4) or, where the change arises from circumstances beyond the incoming EEA firm's control, regulation 7B(5).

SUP 14.2.19 G

10The relevant requirements in regulation 7B(4) are that:

  1. (1)

    the incoming EEA firm has given a notice to the FCA and its home state regulator stating the details of the proposed changes; and

  2. (2)

    either:

    1. (a)

      the FCA has informed the incoming EEA firm that it may make the change; or

    2. (b)

      a period of one month has elapsed beginning with the day on which the incoming EEA firm gave the notice under (1).

SUP 14.2.20 G

10Where the change arises from circumstances beyond the incoming EEA firm's control, the incoming EEA firm is required by regulation 7B(5) to give notice to the FCA and to its Home State regulator stating the details of the change, as soon as reasonably practicable.

SUP 14.2.21 G

10The FCA believes that, for a change to arise from circumstances beyond the control of an incoming EEA firm, the circumstances should be outside the control of the incoming EEA firm as a whole and not just its UKbranch. For example, the FCA considers that this provision would be unlikely to apply to circumstances in which lack of planning at the incoming EEA firm's head office resulted in a problem arising in a UKbranch. In practice, therefore, use of this provision is likely to be rare.

SUP 14.3 Changes to cross border services

SUP 14.3.1 G

Where an incoming EEA firm passporting under the MiFID4, UCITS Directive10, MCD9 or AIFMD6 is exercising an EEA right and is providing cross border services into the United Kingdom, the EEA Passport Rights Regulations govern any changes to the details of those services. Where an incoming EEA firm has complied with the EEA Passport Rights Regulations, then the firm'spermission under Schedule 3 to the Act is to be treated as varied.21

4 6 6 8 8 6 6 6

Firms passporting under the4 UCITS Directive

SUP 14.3.2 G

Where an incoming EEA firm passporting under the UCITS Directive4 is providing cross border services into the United Kingdom, it must not make a change in the details referred to in regulation 5(1A5) unless it has complied with the relevant requirements in regulation 5(3).21

4 5 3
SUP 14.3.3 G

The relevant requirements in regulation 5(3) are that:

  1. (1)

    the incoming EEA firm has given a notice to the FCA11 (see SUP 14.4.1 G) and to its Home State regulator stating the details of the proposed change;

    11
  2. (2)

    if the change arises from circumstances beyond the incoming EEA firm's control, that firm has, as soon as practicable, given to the appropriate UK regulator11 and to its Home State regulator the notice in (1).1

    11
SUP 14.3.3A G

[deleted]5

5
SUP 14.3.4 G

Under regulation 5(4), the FCA11 is required, as soon as practicable after receiving the notice in SUP 14.3.3 G, to inform the incoming EEA firm of any consequential changes in the applicable provisions.

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Firms passporting under MiFID5

SUP 14.3.4A G

4Where an incoming EEA firm passporting under MiFID is providing cross border services into the United Kingdom, it must not:5

  1. (1)

    make a change in the details referred to in regulation 5A(1)(a); or5

  2. (2)

    use, for the first time, any tied agent to provide services in the United Kingdom; or5

  3. (3)

    cease to use tied agents to provide services in the United Kingdom;5

unless it has complied with the relevant requirements in regulation 5A(3).5

SUP 14.3.4B G

5The relevant requirements in regulation 5A(3) are that:

  1. (1)

    the incoming EEA firm has given notice to its Home State regulator stating the details of the proposed change; and

  2. (2)

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

SUP 14.3.4C G

5Under regulation 5(4), the FCA11 is required, as soon as practicable after receiving the notice in SUP 14.3.4B G, to inform the incoming EEA firm of any consequential changes in the applicable provisions.

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SUP 14.3.4D G

5 SUP 14.3.4A G does not apply to a change occasioned by circumstances beyond the incoming EEA firm's control.

Firms passporting under AIFMD7

SUP 14.3.8 G

7Where an EEA AIFM is providing cross-border services to manage an AIF in the UK, it must not make a material change to:

  1. (1)

    the particulars of the programme of operations to be carried out in the UK, including the description of the particular EEA activities; or

  2. (2)

    the identity of the AIFs that the EEA AIFM intends to manage;

unless it has complied with the relevant requirement in regulation 7A(3).

SUP 14.3.9 G

7Where an EEA AIFM is providing cross-border services to market an AIF in the UK, it must not make a material change to:

  1. (1)

    the documents and information referred to in Annex IV to AIFMD; or

  2. (2)

    the statement that the EEA AIFM is authorised to manage AIFs with a particular management strategy;

unless it has complied with the relevant requirement in regulation 7A(3).

SUP 14.3.10 G

7The relevant requirement in regulation 7A(3) is that the Home State regulator has informed the FCA that it has approved the proposed change.

Firms passporting under the MCD

SUP 14.3.11 G

9As required by regulation 7B(1), where an incoming EEA firm is providing cross border services under the MCD in the UK, it must not make a material change to any of the matters referred to in regulation 2(8)(b) to (e) or regulation 3(6)(b) to (e), unless it has complied with the relevant requirements.

SUP 14.3.12 G

9The relevant requirements are set out in regulation 7B(4) or, where the change arises from circumstances beyond the incoming EEA firm's control, regulation 7B(5).

SUP 14.3.13 G

9Where the change arises from circumstances within the control of the incoming EEA firm, the relevant requirements in regulation 7B(4) are that:

  1. (1)

    the incoming EEA firm has given a notice to the FCA and its Home State regulator stating the details of the proposed changes; and

  2. (2)

    either:

    1. (a)

      the FCA has informed the incoming EEA firm that it may make the change; or

    2. (b)

      a period of one month has elapsed beginning with the day on which the incoming EEA firm gave the notice under (1).

SUP 14.3.14 G

9Where the change arises from circumstances beyond the incoming EEA firm's control, the incoming EEA firm is required by regulation 7B(5) to give a notice to the FCA and to its Home State regulator stating the details of the change as soon as reasonably practicable.

SUP 14.4 Notices of proposed changes: form and delivery

SUP 14.4.1 G
  1. (1)

    Regulation 7 to 9 of the Financial Services and Markets Act 2000 (Services of Notices) Regulations 2001 (SI2001/1420) govern the manner in which notices may be submitted to the regulators2 under the EEA Passport Rights Regulations. In summary, they should be delivered or posted to the appropriate UK regulator's2 address (See (2) below) and will be treated as given when received by the appropriate UK regulator2. They should not be sent by fax or electronic mail.

    222
  2. (2)

    [deleted]2

    12
SUP 14.4.1A G

2The address for FCA notices is: The Passport Notifications Unit, The Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS.

SUP 14.5 Variation of a top-up permission to carry on regulated activities outside the scope of the Single Market Directives or the auction regulation2

SUP 14.5.1 G

Where an incoming EEA firm has been granted top-up permission by the appropriate UK regulator3 and wishes to vary that permission, the Act requires it to apply to the appropriate UK regulator3 for a variation of the top-up permission. 1

3 3
SUP 14.5.2 G

Guidance 3 on the procedures for applying for a variation of a permission granted under Part 4A3 of the Act, including a top-up permission, is given in SUP 6 (Applications to vary and cancel Part 4A3Permission).1

3 3

SUP 14.6 Cancelling qualification for authorisation

Incoming EEA firms

SUP 14.6.1 G

Section 34 of the Act states that an incoming EEA firm no longer qualifies for authorisation under Schedule 3 to the Act if it ceases to be an incoming EEA firm as a result of:

  1. (1)

    having its EEA authorisation withdrawn by its Home State regulator; or

  2. (2)

    ceasing to have an EEA right in circumstances in which EEA authorisation is not required; this is relevant to a financial institution that is a subsidiary of a credit institution (of the kind mentioned in Article 345of the CRD5) which fulfils the conditions in articles 33 and 345of that Directive.

    555
SUP 14.6.2 G

In addition, under section 34(2) an incoming EEA firm may ask the appropriate UK regulator7 to give a direction cancelling its authorisation under Schedule 3 to the Act.

7
SUP 14.6.3 G

Regulation 8 states that where an incoming EEA firm which qualifies for authorisation under Schedule 3:

  1. (1)

    has ceased, or is to cease, to carry on regulated activities in the United Kingdom; and

  2. (2)

    gives notice of that fact to the appropriate UK regulator7;

    7

the notice is treated under regulation 8 as a request for cancellation of the incoming EEA firm's qualification for authorisation under Schedule 3 to the Act and so as a request under section 34(2) of the Act.

Auction regulation bidding: notification rule

SUP 14.6.3A R

4An EEA firm that has exercised an EEA right under the auction regulation to establish a branch in the United Kingdom must notify the FCA7 by email to 7emissionstrading@fca.org.uk7 when it ceases to carry on regulated activities through a branch passport in the United Kingdom or whenever possible thereafter.

SUP 14.6.3B G

4 The sole purpose of the notification in SUP 14.6.3A R is to inform the FCA7 that it may discontinue its supervision of the UK branch of the incoming EEA firm's compliance with the applicable provisions. The applicable provisions that apply to that branch are set out in SUP 13A Annex 1 (Application of the Handbook to Incoming EEA Firms).

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Incoming Treaty firms

SUP 14.6.9 G

Section 35 of the Act states that an incoming Treaty firm no longer qualifies for authorisation under Schedule 4 to the Act if its Home State authorisation is withdrawn.

SUP 14.6.10 G

In addition, under section 35(2) an incoming Treaty firm may ask the appropriate UK regulator7 to give a direction cancelling its authorisation under Schedule 4 to the Act.

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UCITS qualifiers

SUP 14.6.11 G

Section 36 of the Act states that a UCITS qualifier may ask the FCA7 to give a direction cancelling its authorisation under paragraph 1(1) of Schedule 5 to the Act. UCITS qualifiers should also refer to COLLG 3.1.11 G (Revocation of recognition of overseas schemes (section 279)3).1

7 3 3

SUP 14.7 Cancellation of a top-up permission to carry on regulated activities outside the scope of the Single Market Directives or the auction regulation1

SUP 14.7.1 G

Where an incoming EEA firm, an incoming Treaty firm or a UCITS qualifier wishes to cancel its top-up permission, either with or without cancellation of its qualification for authorisation under Schedule 3, 4, or 5 to the Act, it should make an application following the procedures set out in SUP 6 (Applications to vary and cancel Part 4A2Permission).

2