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Passport notifications under the BCD
Practical Law Legal Update 7-385-2017 (Approx. 3 pages)
Passport notifications under the BCD
by Simon Lovegrove, Norton Rose LLP
| Published on 05 Mar 2009 • United Kingdom |
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In February 2009, CEBS published for comment draft guidelines on passport notifications. These aim to provide a framework for EEA regulators in relation to new notifications sent under the BCD in light of the implementation of MiFID, as well as introducing adjustments to the earlier protocol adopted by CESR to address differences between MiFID and the BCD.
Any EEA firm wanting to carry on business in another EEA state may do so if it is within the scope of a relevant EU Single Market Directive. In the UK the Financial Services and Markets Act 2000 refers to this as an EEA right and the exercise of such rights is known as passporting.
A firm that comes within a relevant Single Market Directive may provide services or perform activities either through a branch or through the provision of services cross-border from its home member state.
The relevant EU Single Market Directives include the:
- Markets in Financial Instruments Directive (MiFID) (for investment firms).
- Banking Consolidation Directive (BCD) (for credit institutions and financial institutions).
- UCITS Directive (for UCITS management companies).
- Insurance Mediation Directive (for insurance and reinsurance intermediaries).
- Third Non-Life Insurance and Consolidated Life Assurance Directives (for insurers).
- Reinsurance Directive (for reinsures).
Credit institutions and financial institutions that have passport rights under the BCD and who carry on investment business do not have passport rights under MiFID. However, credit institutions are able to passport MiFID investment services and activities under the BCD.
In May 2007 the Committee of European Securities Regulators (CESR) published a protocol on passport notifications under MiFID. The protocol sought to introduce a common framework for EEA regulators with regard to the passport notification provisions of MiFID.
On 11 February 2009, the Committee of European Banking Supervisors (CEBS) published for comment draft guidelines on passport notifications. The purpose of the guidelines is to provide a framework for EEA regulators in relation to new notifications sent under the BCD in light of the implementation of MiFID. The annexes to the guidelines set out uniform forms for a variety of issues including the notifications for cross-border services and establishment of branches. The guidelines also introduce adjustments to the protocol adopted by the CESR to address differences between MiFID and the BCD and the specific nature of credit institutions. The consultation on the guidelines runs until 11 May 2009.