YOUR COMPLIANCE MATTERS:          Passporting

YOUR COMPLIANCE MATTERS:         Passporting

Relevance:                 Any firm conducting financial services business in the EU.

Action required:       Review the management of EEA clients post Brexit

The UK left the EU on 31 January 2020 with a Withdrawal Agreement and entered a transition period which is due to operate until 31 December 2020.

So, from 01 January 2021, a number of things will change. We have recently pointed firms to one of area of affected, “Consumer Rights”. Another one is “Passporting”.

As a reminder, “Passporting” allows firms authorised in an EEA state to conduct business within other EEA states based on their ‘home’ member state authorisation.  “Passporting” between the UK and EEA states will end at the end of the transition period.

This will affect:

·        firms and funds based in the UK that conduct business in the EEA; and

·        firms and funds based in the EEA that carry out certain types of business in the UK

The temporary permissions regime (TPR) will enable relevant firms that passport into the UK to continue operating in the UK when the “Passporting” regime falls away at the end of the transition period.

However, the same is not true for firms conducting business in the EEA. To continue, those firms will need to work with the regulator of the particular EEA country they have been operating in, to negotiate individual permissions.

This situation does not affect many of our client firms, but we feel it worthwhile issuing this newsletter as part of our ongoing reminders to firms of the effect of Brexit on business.

We will continue to review the relevant changes that need to be made from January 2021 as a result of the transition period ending and will advise firms accordingly.

If you need to discuss any aspect of this matter with us, please make contact in the normal way.