Skip to main content

Passporting Financial Services to the UK

21.02.2024 | Publications

A ‘hot’ topic since the United Kingdom’s (“UK”) (and concurrently, Gibraltar’s) withdrawal from the EU on the 31 January 2020 (“Brexit”) has been what requirements an EU firm needs to meet to enable it to provide Financial Services into the UK and Gibraltar. Uniquely, the UK market can be accessed directly by firms that are duly authorised in Gibraltar whose authorisation procedures will usually be quick.

Following Brexit, if EU firms wished to provide their services into the UK, they needed to apply for permission to the Financial Conduct Authority (“FCA”) under the Temporary Permissions Regime (“TPR”).  TPR only allowed successful firms to passport their services into the UK until 31 December 2023.

However, Gibraltar licensed financial businesses alone in the world enjoy a unique passport[1] allowing them to transact business in the UK market, one of the world greatest capital markets. This passporting has been extended until the 31 December 2024[2].

It is envisaged that this passport to transact business in the UK market will be further extended until made permanent by the Gibraltar Authorisations Regime. The same is also true for ‘Single Market Directives’[3].

 

EU Firms and the Gibraltar Authorisations Regime

A simple solution for an EU firm that has lost its right to passport into the UK is to establish itself in Gibraltar to maintain access to the UK market.

Gibraltar and the UK continue to have mutual market access and aligned financial services standards to each other’s financial markets thanks to the Gibraltar Authorisation Regime, as the UK and Gibraltar have decided uniquely, following Brexit, that Gibraltar-licensed businesses are permitted to provide the financial services for which they are licensed into the UK market.

EU firms are unable to do that.

Gibraltar Financial Services Commission, Gibraltar’s regulator, deals with a smaller market, so it can process licensing applications more efficiently than regulators tasked with regulating a larger market. That makes it an attractive destination for EU companies looking to do business the UK. it.

Gibraltar has a world-class pro-active regulator and a low corporate tax rate coupled with local laws in line with the standards expected from other EU countries.

All that makes setting up in Gibraltar a ‘no brainer’.

In the meantime, negotiations also continue for a treaty between the UK and the EU in respect of Gibraltar (the “Treaty”) with the objective of creating fluidity for persons and goods at the border with Spain.

 

How Triay’s Financial Services team can help…

Gibraltar’s regulatory framework and business environment make it a favourable jurisdiction for the development and regulation of financial businesses wishing to passport their services into the UK. As the industry continues to grow and evolve, Gibraltar is well-positioned to play a leading role in shaping its future.

 

The jurisdiction’s supportive regulatory framework, coupled with its strategic location and business-friendly environment, make it an attractive destination for businesses looking to establish a presence in Europe.

 

 

[1] Financial Services and Markets Act 2000 (Gibraltar) Order 2001

[2] Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2023

[3] Financial Services (Passport Rights and Transitional Provisions) (EU Exit) Regulations 2019


  SHARE

Contact a Lawyer