Despite the conclusion of the EU-UK Trade and Cooperation Agreement, there continues to be a lack of clarity about the UK’s future relationship with the EU for financial services and, as such, Brexit remains a focus area for regulators as they work to mitigate the effects of the UK’s withdrawal from the EU. Equivalence assessments are ongoing and, while the UK has concluded a number of equivalence decisions relating to EEA financial services, at the time of writing the European Commission has yet to grant equivalence beyond temporary decisions relating to central clearing and securities depositories. In the absence of equivalence decisions allowing financial services firms to continue to service contracts and clients, transitional measures have been established in some jurisdictions.
In the UK, to help EEA firms adapt to the post-Brexit UK regulatory regime, HM Treasury has established the Temporary Transitional Power, which gives UK financial regulators the power to make transitional provisions in relation to financial services legislation for a temporary period. For EEA firms conducting business in the UK, temporary permissions regimes have been established to help firms and investment funds continue their UK business with minimal disruption post-Brexit; the regimes took effect when the Brexit transition period ended on 31 December 2020. For more information on the UK’s transitional regimes, see our client alert here.
No comparable measures have been established at the EU or EEA level. In individual EEA member states, the picture is more varied, and where measures exist, the focus is mostly on contractual continuity and run-off. In some cases, individual member states also have national third country access regimes in place that can be used by UK firms. It may also be possible to rely on reverse solicitation to provide services without authorisation in certain member states, although a recent statement from the European Securities and Markets Authority reminds firms that reverse solicitation is to be interpreted cautiously. This note sets out a brief guide to these Brexit-related transitional and other national measures in a number of key EEA member states, including temporary permissions regimes and contractual continuity arrangements, that have been enacted firms (or not) for UK financial services. Jurisdictions covered include:
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