For the purposes of point (a) of Article 382(4) of Regulation (EU) No 575/2013, institutions shall consider as non-financial counterparties established in a third country, counterparties that meet both of the following conditions:
they are established in a third country;
they would qualify as a non-financial counterparty within the meaning of point (9) of Article 2 of Regulation (EU) No 648/2012 if they were established in the United Kingdom.
Institutions shall verify whether a counterparty is a non-financial counterparty established in a third country:
at trade inception when trading with a new counterparty;
on an annual basis for existing counterparties;
where there is reason to believe that the counterparty is no longer a non-financial counterparty established in a third country.
Institutions shall substantiate their opinion that an undertaking is a non-financial counterparty established in a third country.
Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.