EU View Bulletin: 27 June 2023

We are delighted to share with you the latest EU View Bulletin. Here you will find information about the latest intel we have gathered across the EU27 (plus 3 EEA jurisdictions) together with any country specific changes to the EU View guidelines. As with everything we do, the output is best when we get continuous feedback – so as per usual – do let us know what we can do to enhance EU View.

Latest intel on UK developments:

FCA’s Temporary Permission Regime (“TPR”)

As you may be aware, the TPR shall end on 31 December 2023. Firms that wanted to apply for full authorisation in the UK should have done so by 31 December 2022 before the FCA closed the final landing slots to discuss their “full” authorisation application in the UK. An application from a firm in the TPR which is submitted after this date will be treated as invalid by the FCA. Please see here for more information. The FCA expects firms without a valid reason for not seeking full authorisation to voluntarily apply to cancel their temporary permission and either enter the Financial Services Contracts Regime (FSCR) to run-off their UK business (if eligible) or leave the UK regulatory perimeter.

Passporting

The FCA has also extended the “deemed-passporting” between the UK and Gibraltar until 31 December 2023 until the permanent arrangements of the Gibraltar Authorisation Regime are in place. Please see the FCA website here.

Mutual Recognition Agreement

In addition, the UK and Switzerland are working to conclude an international agreement towards mutual recognition of each other’s regulatory and supervisory regimes in the fields of insurance, banking, asset management and capital markets (including market infrastructure). They are also hoping to improve access for the cross-border provision of financial services for wholesale and sophisticated clients in those sectors. Whilst the negotiations are ongoing, the intention is to conclude the agreement by the end of summer 2023. Please see the latest press release here.

Latest intel on EU27+3EEA developments:

Norway Temporary Permission Regime

The Ministry of Finance has confirmed that the third-country temporary permissions regime for professional clients and eligible counterparties has been extended until 01 October 2023 (having been due to expire previously on 01 April 2023).

KID requirement for UCITS

In the latest update, the exemption from the KID requirement for UCITS expired on 31 December 2022. Accordingly, effective 01 January 2023, UCITS are subject to the KID requirement under the PRIIPs Regulation. Local implementation may still permit the UCITS KIID in certain circumstances.

Temporary Exemption Threshold

Following the expiry of the temporary exemption threshold for non-equity securities issued by a credit institution in a continuous or repeated manner (of EUR 150 million), the exemptions have been updated (with the position reverting to the EUR 75 million exemption which applied before 18 March 2021) in Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain and Sweden.

Changes to the EU View Guidelines:

As a result of recent developments and further clarifications from counsel, the following updates have been made:

Belgium

The language in relation to the lending exemption has been clarified to reflect that lending is permitted as long as: (i) it constitutes commercial lending (i.e. not consumer credit); and (ii) it is not carried out in conjunction with deposit taking from the public in Belgium.

Estonia

Any fly-in activities following an unsolicited request should (i) focus mainly on activities such as signing the agreement and not the actual provision of activities, (ii) be highly exceptional (i.e, not more often than once a year), and (iii) be carried out only for low value transactions (i.e., not more than EUR 1 million calculated over a period of 12 months).

Finland

The local regulator has taken an informal position that non-EEA banks can participate in foreign exchange trading on own account with Finnish professional counterparties, without triggering any licensing issues in Finland (as it is not deemed a service).

Romania

As a result of recent legislative changes, it has been clarified in relation to reverse enquiry that the promotion of new categories of investment products or services to a client would not be permitted unless a new reverse enquiry has been submitted by such client. Further, a third party referral does not qualify as an unsolicited request.

Norway

The extension of the temporary permissions regime for third-country entities (referred to above) has been noted. Further, it has been clarified that a licensing requirement will not be triggered by the sale of a loan in the secondary market (the original lending having triggered a licensing requirement).

Slovenia

An offer which falls within the offering restriction exemptions will still be considered a public offer for the purposes of Slovenian law and as a result a notification will need to be made to the Securities Market Agency (“SMA”) prior to any offer pursuant to the exemptions. This notification requirement has been included in the guidelines.

Sweden

It has been clarified that the existing toleration for fly-ins (30-35 visits per year) applies on the basis that none of the visits last more than 1-2 days (this per visit duration limitation was not previously noted).

XBTech - Jurisdiction coverage outside EEA:

XBTech can be made available for any of the 140+ jurisdictions covered by navigator. We already have Anguilla, Argentina, Australia, Bahrain, Bermuda, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Dominican Republic, Mexico, New Zealand, Peru and Switzerland available – with more coming online soon. Please contact us if you would like to find out more.

And finally, in addition to this bulletin there is also a wealth of additional information on the Brexit pages on our website. As always, please feel free to reach out if you have specific queries we can assist with.