Financial Services Sector – Brexit update: European temporary permissions/reverse solicitation recognition

The recently concluded Trade Agreement between the EU and the UK, which fails to address trade in financial services in detail, has resulted in regulatory divergence across EU Member States, leading to uncertainty for UK firms providing regulated financial services (FS) (UK Firms) in the EU before 31 December 2020, when the transition period based on the withdrawal agreement between the EU and the UK came to an end (Relevant Date). One thing that is clear is that such firms can no longer avail of passporting rights and so must look to whether temporary measures have been adopted in EU Member States to allow for orderly termination of activities by UK firms, while ensuring minimum disruption to EU customers.

While the UK and the EU are aiming for a Memorandum of Understanding (MoU) in March 2021 on a framework for cooperation between regulators that oversee financial services, this still leaves many in the FS sector in uncertainty. We have put together this paper to assist, in particular, UK clients in considering the extent to which they can continue to operate in EU Member States, either through a temporary permissions regime or through recognised exemptions, such as the recognition of "reverse solicitation".

Download the full publication here.