EU View Bulletin - November 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:

Financial Services and Markets Act 2023 ("FSMA 2023")

FSMA 2023 has become law receiving the Royal Assent on 29 June 2023. It is a broad far-reaching piece of legislation making significant and structural changes to UK's financial services regulatory framework including e.g. revocation of certain EU retained law (e.g. UK MiFIR, UK PRIIPs, UK EMIR) and granting extensive powers to the FCA and the PRA to facilitate international competitiveness of the UK financial markets.

Temporary Marketing Permission Regime ("TMPR")

The existing TMPR which was put in place to allow EEA funds marketed in the UK before Brexit to continue to access the UK market, is not viable over the long-term and is due to expire on 31 December 2025. To replace the TMPR, the UK government launched a new process, namely, Overseas Funds Regime ("OFR"). The majority of its provisions are already in force and the UK government has commenced its equivalence assessment of the EU and EEA under the OFR. However, HM Treasury is yet to make any equivalence decisions and the FCA is still to publish details about how the OFR will work in practice and what information the FCA need from firms in order to register their funds under the OFR.

We are tracking these developments very closely and will do a call out to the market as soon as the FCA's consultation paper goes live. Please let us know if you would like to be added to our OFR distribution list.

FCA's new Financial Promotions Gateway

The new financial promotions gateway requires firms seeking to approve the financial promotions of unauthorised persons to obtain the FCA's permission during the upcoming application window, unless an exemption to the gateway applies. To apply, firms will be required to submit a variation of permission application to the FCA.

Not only will the application process be relatively time consuming and costly for authorised firms, but the application window is short. Existing authorised firms will be able to apply to the FCA for permission during the initial application period. That period will run from 6 November 2023 to 6 February 2024. If an authorised firm does not apply during the 3 month window, the firm will need to stop approving financial promotions for unauthorised persons on 7 February 2024.

Two recent insights on the topic are also available on our website:

• The new FCA Financial Promotions Gateway - are you ready?
• Approving finproms - new gateway regime finalised

In addition, a webinar regarding this topic is also available here.

Finally, we are excited to announce the creation of our new Financial Promotions Gateway Toolkit which covers the following:

• Guidance notes on completing the VoP
• Note on OFR considerations
• Note on assessing competence and expertise
• Guidance notes on ad hoc notifications
• Guidance notes on bi-annual reporting
• Draft board/committee paper (if you need internal approval to submit the VoP)
• Zip folder containing FCA fin prom documents (non-exhaustive but most of the key documents)

Please let us know if you are interested to know more or purchase the Toolkit.

Latest intel on EU27+3EEA developments: 

Finland

The Digital Operational Resilience Act ("DORA") entered into force on 16 January 2023 and will apply from 17 January 2025. It is intended to strengthen financial services firms' operational resilience of entities across the EU financial sector and to further harmonise key digital operational resilience requirements for all EU financial entities. DORA applies to more than 22,000 financial entities and ICT service providers operating within the EU, as well as the ICT infrastructure supporting them from outside the EU. In Finland, it seems that the proposed local implementation of DORA is currently going to apply to UK firms with third country cross-border licences. Simmons is discussing with clients the potential route of approaching the Finnish Ministry of Finance not to extend DORA to non-EU firms. Please let us know if you would like further information on this progression.

Changes to the EU View Guidelines: 

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

Norway

A new permanent legal exemption has been introduced that permits all non-EEA entities (with head offices outside the EEA) to provide/perform investment services/activities (with or without ancillary services) to eligible counterparties in Norway, subject to meeting certain conditions, without further requirement of a licence/notification from/to the Norwegian local regulator.

Finland

The local regulator has taken an informal position that non-EEA banks can deal in FX Spot Contracts on own account with Finnish professional counterparties, without triggering any licensing issues in Finland.

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.

Upcoming events:

You may be interested in the following event:

Preparing for a product recall

28 November 2023

The joint webinar with Lockton, the world's largest independent insurance brokerage covers the legal and regulatory framework around product recalls in the UK, to find out more please follow the link.

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.