On 24 December 2020, we posted an update on the EU27 temporary transitional measures. Since posting this update, we understand that there have been further developments in several EU27 Member States as to the temporary transitional measures that are available, and we have updated our summary table to reflect these developments.
The summary table reflects our understanding of the current position, and we will publish further updates in due course as we receive them. We have not, for these purposes, focused on reverse solicitation which may, in some jurisdictions, provide a further route through which activities can be provided.
Summary of jurisdictions with recent significant developments to the temporary transitional measures in place
We list below the jurisdictions where there have recently been significant developments in regards to the temporary transitional measures:
- Belgium – On 23 December 2020, an amendment to the Belgian Brexit law was published which allows the government to provide for a transitional period for such entities that, as a result of Brexit, lose their European passport and have not yet obtained the authorisation to exercise their activities or provide their services in Belgium from 1 January 2021. Whilst the transitional period is currently not in place and will need to be introduced by means of a Royal Decree which the government can now enact, the amendment gives an indication of the direction Belgium will be going with respect to granting certain transitional relief to financial services firms. Should it be introduced, the transitional period will last no longer than 12 months (so will expire on 31 December 2021) and would enable UK firms to continue to provide services in Belgium provided that: (1) They have submitted an application for the required licence or registration with the competent Belgian regulator; (2) They are duly authorised in the UK for the activities they perform or services they provide; and (3) They only intend to provide these services in Belgium to non-consumers (i.e. to professional clients and eligible counterparties only).
- Cyprus – On 22 December, the Cyprus Securities and Exchange Commission announced the introduction of a Temporary Permissions Regime to be made immediately available to UK-authorised investment firms to facilitate smooth post-Brexit transition. Eligible under the Cyprus TPR are UK-investment firms without physical presence in Cyprus providing investment services and/or carrying out investment activities with Cyprus-based professional clients and eligible counterparties.
- Finland – The passive servicing of an existing client in Finland with which the credit institution has concluded an agreement for the provision of banking services under CRD IV Annex 1 may continue under the existing terms of the service. Therefore, maintenance of existing agreements, including e.g. receiving/collecting payments under existing loans and permitting clients to use their existing bank accounts in accordance with their terms, is permitted. Accordingly, agreements concluded with Finnish clients prior to Brexit need not be terminated. However, the FFSA noted that the concept of passive servicing of existing agreements does not permit the parties to novate or extend the term of existing loan agreements (in lieu of repayment as per the original terms and conditions) after 1 January 2021.
- Germany – On 31 December 2020, BaFin published a limited national relief measure in the insurance sector. By way of general administrative order, the regulator has allowed for a run-off of existing business of UK insurance undertakings and institutions for occupational retirement provision (IORPs) that have operated under the respective European passports on a cross-border basis so far. However, BaFin has imposed certain conditions. In particular, the UK entities must terminate the existing contracts with clients as soon as possible.
- Italy – A partial relief on the Brexit transition period has been granted to UK credit institutions, electronic money institutions operating through a branch and investment firms that submitted the authorization application to the relevant competent authority before 31 December 2020. Conversely, UK payment institutions, electronic money institutions operating under the freedom of services regime and asset management companies are excluded from the temporary transitional measures and thus will not be able to continue operating in Italy. For further details on the new temporary measures, please see this blog issued by colleagues in Italy.
- Liechtenstein – Under the Liechtenstein transitional regime, it is possible for UK credit institutions and investment firms to provide cross border services to eligible counterparties and per se professional clients upon making a notification to the FMA. It will be possible to file such a notification as long as the transitional regime is in place. The activity may be taken up once the FMA has confirmed the completeness of the notification submitted. This regime is to stay in place until 31 December 2022, or if earlier, the entry into force of an equivalence decision in the EEA.
- Netherlands – The Dutch government does not consider it necessary to implement the temporary transition regime for UK investment firms that was proposed previously. According to the Dutch government, financial institutions have had sufficient time to amend contracts and/or relocate activities and sufficient preparations have been made. For further details please see this blog that colleagues in the Netherlands have recently issued.
- Norway – In 2018, the Ministry of Finance adopted a temporary regulation authorising firms established outside the EEA that perform investment services and activities in Norway based on home state authorisation and supervision under the EEA Agreement, to continue to provide such investment activities to per se professional clients and eligible counterparties in Norway after the UK’s exit from the EU, subject to the firm being duly passported into Norway as of 31 December 2020. The Ministry has recently adopted amendments specifying that the regulation will remain in force after 31 December 2020but will be revoked on 1 January 2023.
- Portugal – The Portuguese TPR was published on 23 December, with specific provisions concerning inter alia banking and investment services, UCITS/AIFs, and insurance agreements. The TPR applied from 1 January 2021 and will cease to apply on 31 December 2021 (subject to certain exceptions, notably contract continuation of some banking and insurance agreements).The regime sets out a period during which firms may opt to either continue to exercise the relevant activity in Portugal, subject to compliance with certain requirements, or for an orderly cessation of the activity within a reasonable timeframe.
- Sweden – The Swedish government has adopted a new provision as part of the existing temporary permission regime, which sets out an exemption relating to UK firms whose sole investment activity in Sweden is trading on their own account on a marketplace. Provided that such a firm had exercised the right to provide services in Sweden (on the basis of the so-called passport regime) on 29 March 2019, that the trading takes place through direct electronic access on a marketplace and that the trading is covered by the firm’s authorisation in its home jurisdiction, then such trading is allowed without having a Swedish authorisation in place until the end of 2021.
Summary of current position
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Are there currently any temporary transitional measures in place? |
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Summary |
Further detail |
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Austria |
No temporary permissions regime that would enable UK firms to provide cross-border services. |
The ‘BREXIT – Accompanying Law 2019’ did not enter into force as it was enacted under the condition that the UK leaves the EU without a Withdrawal Agreement. Currently, no other measures have been proposed. |
Stefan Geppert Geppert & Maderbacher Rechtsanwälte GesbR |
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Belgium |
Currently there is no transitional regime in place, however a legal framework is in place which allows the Belgian government to introduce a transitional period for non-consumer business. |
On 23 December 2020, an amendment to the Belgian Brexit law was published which allows the government to provide for a transitional period for entities that, as a result of Brexit, lost their European passport and have not yet obtained the authorisation to exercise their activities or provide their services in Belgium. Whilst the transitional period is currently not in place and will need to be introduced by means of a Royal Decree which the government can now enact, the amendment gives an indication of the direction Belgium will be going with respect to granting certain transitional relief to financial services firms. Should it be introduced, the transitional period will last no longer than 12 months (so will expire on 31 December 2021) and would enable UK firms to continue to provide services in Belgium provided that:
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Matthias De Cock
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Bulgaria |
No temporary permissions regime that would enable UK firms to provide cross-border services. | – |
Krassimir Stephanov Djingov, Gouginski, Kyutchukov & Velichkov
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Croatia |
No temporary permissions regime that would enable UK firms to provide cross-border services. | Croatian Agency for Supervision of Financial Services published a detailed notice on its website on 1st December 2020 confirming no temporary permission regime for UK entities providing cross border financial services.
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Mr Edin Karakaš edin.karakas@zuric-i-partneri.hr Mr Mihovil Granić mihovil.granic@zuric-i-partneri.hr
Žurić i Partneri (see website) |
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Cyprus |
Temporary permissions regime is in place that enables UK investment firms to provide cross-border services. It is worth noting that this regime is only available in relation to per se professional clients and eligible counterparties. It is not available in relation to retail or elective professional clients. Further, it is not available to credit institutions. |
On 22 December 2020, the Cyprus Securities and Exchange Commission (CySEC) announced the introduction of a Temporary Permissions Regime (the Cyprus TPR) to be made immediately available to UK-authorized investment firms without a physical presence in Cyprus which provide investment services and/or carry out investment activities with Cyprus-based per se professional clients (i.e. within the meaning of Section I of Annex II to MiFID II) and eligible counterparties. UK investment firms seeking to make use of the TPR must have submitted a relevant notification form to CySEC by 31 December 2020. Firms benefiting from the Cyprus TPR are able to solicit and enter into new contracts with per se professional clients and/or eligible counterparties in Cyprus on a cross-border basis until 31 December 2021 without needing to establish a branch in Cyprus. From 1st January 2022, UK investment firms which previously relied on the Cyprus TPR and which seek to continue soliciting professional clients and/or eligible counterparties in Cyprus, will need to be authorized by CySEC in accordance with the applicable framework for non-EU investment firms, and will need to establish a Cyprus branch.
There is no temporary permissions regime available relating to the provision of investment services or the performance of investment activities with retail clients or elective professional clients of UK investment firms. Similarly, there is no Cyprus temporary permissions regime for clients of UK credit institutions in Cyprus, as the Cyprus TPR does not apply for any category of clients of UK credit institutions as regards either banking or investment services and activities by such institutions. In these instances, the marketing, solicitation and offering of such services and activities by UK firms not covered under the Cyprus TPR after 1 January 2021 triggers branch authorisation requirements under the Cyprus laws transposing the provisions of CRD IV and MiFID II. |
Dimitris Papoutsis Tel +357 25 110145 Elias Neocleous & Co LLC
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Denmark |
No temporary permissions regime that would enable UK firms to provide cross-border services. |
In accordance with Danish legislation:
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Estonia |
No temporary permissions regime that would enable UK firms to provide cross-border services. |
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Krista Severev Tel +372 6 400 903
Sorainen |
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Finland |
No temporary permissions regime that would enable UK firms to provide cross-border services. There is some limited ability for UK credit institutions to continue to “passively service” existing contracts. |
Since 1 January 2021, UK domiciled credit institutions have been prohibited from marketing or offering new credit institution/banking services to new or existing clients in Finland. All activities that may be perceived as marketing of credit institution services, including maintaining Finnish language websites, need to have been discontinued. The offering of new credit institution/banking services requires the establishment of a local Finnish branch. However, the passive servicing of an existing client in Finland with which the credit institution has concluded an agreement for the provision of banking services under CRD IV Annex 1 (including, for example, taking of deposits, lending, provision of guarantees) may continue under the existing terms of the service (there is no specific timeframe for this so the agreements may continue to run on passive servicing until expiry or termination). Therefore, maintenance of existing agreements, including e.g. receiving/collecting payments under existing loans and permitting clients to use their existing bank accounts in accordance with their terms, is permitted. Accordingly, agreements concluded with Finnish clients prior to Brexit need not be terminated. However, the FFSA noted that the concept of passive servicing of existing agreements does not permit the parties to novate or extend the term of existing loan agreements (in lieu of repayment as per the original terms and conditions) after 1 January 2021. Given the complexities around this and the associated risks, clients would be advised to exercise due care in performing existing agreements and to avoid any actions that may be considered as the provision of new services to clients in Finland. |
Maria Lehtimäki T:+358 9 668 95235 | M: +358 40578 9398
Waselius & Wist
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Germany |
There is a limited run-off regime for firms in the insurance sector but otherwise there is no temporary permissions regime that would enable UK firms to provide cross-border services.
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The German legislator introduced various legislative measures at the federal and state level in preparation of Brexit. One of the key federal acts was the ‘Tax Act relating to Brexit’ (Brexit-Steuerbegleitgesetz – Brexit-StBG). Among other things the Brexit-StBG introduced a national transition regime for regulated UK market participants operating in Germany under an EU passport. However, these transitional rules were limited to a no-deal Brexit scenario in which the UK would have left the EU without any Withdrawal Agreement. The national transition regime has not been renewed and no longer applies. Under general rules for non-EEA entities, two exemptions from the national licensing requirements could be particularly relevant for UK market participants: (i)an exemption from the licensing requirements granted in an individual case, and (ii) a new exemption for Proprietary Business as a member of a trading venue. The German regulator (BaFin) has stated that the provisions of the Trade and Cooperation Agreement will apply to financial services only to a limited extent and has repeated that the UK service providers have, since 1 January 2021, no longer been able to use the European passports. On 31 December 2020, BaFin published a limited national relief measure in the insurance sector. By way of general administrative order, the regulator has allowed for a run-off of existing business of UK insurance undertakings and institutions for occupational retirement provision that operated under the respective European passports on a cross-border basis pre-Brexit. However, BaFin has imposed certain conditions on firms seeking to rely on this regime, most notably that the UK entities must terminate the existing contracts with clients as soon as possible.
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Michael Born Michael.Born@nortonrosefulbright.com Norton Rose Fulbright LLP
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Iceland |
No temporary permissions regime that would enable UK firms to provide cross-border services. |
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Guðbjörg Helga Hjartardóttir Tel +354 540 0300 Logos Legal Services
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Italy |
Transitional measures are in place which provide UK firms with an ability to carry on certain limited activities, provided an application for authorisation was made prior to 31 December 2020. |
A partial relief on the Brexit transition period has been granted to UK credit institutions, electronic money institutions operating through a branch and investment firms (the UK Regulated Entities) that submitted an authorization application to the relevant competent authority (Bank of Italy for credit institutions and electronic money institutions and CONSOB for investment firms) before 31 December 2020. Conversely, UK payment institutions, electronic money institutions operating under the freedom of services regime and asset management companies are excluded from the temporary transitional measures and thus will not be able to continue operating in Italy. In general, under new temporary measures (art. 22 of Law Decree No. 183 of 31 December 2020):
For further details on the new temporary measures, please see this blog issued by colleagues in Italy.
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Pietro Altomani Pietro.Altomani@nortonrosefulbright.com Maria Beatrice Gilesi MariaBeatrice.Gilesi@nortonrosefulbright.com Norton Rose Fulbright LLP
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Liechtenstein
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A transitional regime is available (upon notification to the Liechtenstein Financial Market Authority (FMA)) to UK credit institutions and investment firms seeking to provide services into Liechtenstein. This regime is not available in relation to retail clients. |
Under the Liechtenstein transitional regime, it is possible for UK credit institutions and investment firms to provide cross border services to eligible counterparties and per se professional clients upon making a notification to the FMA. It will be possible to file such a notification as long as the transitional regime is in place. However, note that such notification must be made in advance of taking up or continuing the activities by the relevant entity in Liechtenstein. The activity may only be commenced or continued once the FMA has confirmed the completeness of the notification submitted. The notification must be made in accordance with Art 35c Banking Ordinance. This regime shall will be in place until 31 December 2022, or if earlier, the entry into force of an equivalence decision in the EEA. There is no temporary relief regime available relating to the provision of services to retail clients. |
Hannes Arnold hannes.arnold@gasserpartner.com Gasser Partner |
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Luxembourg |
No temporary permissions regime that would enable UK firms to provide cross-border services. | The previous relief measures that were in place expired with the introduction of the transitional regime – this is because previous CSSF communications were issued on the basis of a no deal Brexit. Further CSSF individual decisions granting a 12 month transition regime to UK entities and all notifications made in that context have lapsed.
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Nam Nguyen Nam.Nguyen-Groza@nortonrosefulbright.com Manfred Dietrich Manfred.Dietrich@nortonrosefulbright.com Norton Rose Fulbright LLP |
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Malta |
No temporary permissions regime that would enable UK firms to provide cross-border services. | The temporary permission regime has expired and the MFSA has not indicated that it will renew or introduce another temporary permission regime. |
David Borg Carbott Ganado Advocates
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Monaco |
No temporary permissions regime that would enable UK firms to provide cross-border services. | – |
Remi Delforge DL Corporate & Regulatory |
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Netherlands |
No temporary permissions regime that would enable UK firms to provide cross-border services. | The Dutch government does not consider it necessary to implement the temporary transition regime for UK investment firms that was proposed previously. According to the Dutch government, financial institutions have had sufficient time to amend contracts and/or relocate activities and sufficient preparations have been made.
The Dutch Minister of Foreign Affairs indicates that the key instrument for the provision of financial services will be the equivalence of the current regulatory frameworks of the EU and the UK. |
FloortjeNagelkerke Floortje.Nagelkerke@nortonrosefulbright.com Norton Rose Fulbright LLP |
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Norway |
Temporary permissions regime is in place that enables UK firms to provide cross-border services. It is worth noting that this regime is only available in relation to per se professional clients and eligible counterparties. It is not available in relation to retail or elective professional clients. Further, it is not available to credit institutions. | In 2018, the Ministry of Finance adopted a temporary regulation authorising firms established outside the EEA that perform investment services and activities in Norway based on home state authorisation and supervision under the EEA Agreement to continue to provide such investment activities to per se professional clients and eligible counterparties in Norway after the UK’s exit from the EU, subject to the firm being duly passported into Norway as of 31 December 2020 (the regulation gives the Ministry of Finance the ability to impose further conditions, but no such conditions exist or are expected at the moment). Please note that the regulation does not apply to opt-up professionals or retail clients.
The Ministry recently adopted amendments specifying that the regulation remains in force after 31 December 2020 but will be revoked on 1 January 2023. For insurance contracts, credit/deposits and marketing of funds, different regimes apply and there is some uncertainty still. |
Ole Andenæs Wikborg Rein Advokatfirma AS |
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Poland |
No temporary permissions regime that would enable UK firms to provide cross-border services. | – | Agnieszka Braciszewsk Agnieszka.Braciszewska@nortonrosefulbright.com
Norton Rose Fulbright LLP |
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Portugal |
Temporary permissions regime is in place that enables UK firms to provide cross-border services. | A temporary permissions regime (the Portuguese TPR) is in place for UK entities that provide financial services in Portugal. The Portuguese TPR covers banking and investment services, UCITS/AIFs, and insurance agreements.
The Portuguese TPR applied from 1 January 2021 and will cease to apply on 31 December 2021 (subject to certain exceptions, notably contract continuation of some banking and insurance agreements). The Portuguese TPR provides that credit institutions, payment service providers and e-money institutions, with their head office in the UK and which previously acted in Portugal under an EU Passport may, after 1 January 2021 UK credit institutions and investment firms relying on the Portuguese TPR must then take the following steps:
UK entities that do not submit a notification or an authorisation request as set out above may only carry out operations which are necessary to terminate ongoing agreements and must end any operations in Portugal by 31 December 2021.
For completeness, it is worth adding that credit institutions, payment service providers and e-money institutions with their registered office in the UK and which had acted in Portugal under an EU Passport, can only execute contracts or carry out new transactions in Portugal with respect to deposit-taking, lending and payment or e-money services, if they are authorised to do so by the Bank of Portugal. |
João Dias Lopes
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Romania |
No temporary permissions regime that would enable UK firms to provide cross-border services | – |
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Slovakia |
No temporary permissions regime that would enable UK firms to provide cross-border services. | Whilst Slovakia adopted various measures concerned several areas, such as tax advisors, attorneys, private vets, social security insurance, health care insurance, employment services, drug and medical devices, residence of foreigners, etc., none of these dealt with the position of UK financial services firms. |
Oliver Weber oliver.weber@beatow.com Beatow Partners |
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Slovenia |
No temporary permissions regime that would enable UK firms to provide cross-border services. | –
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Ana Furlan Rojs, Peljhan, Prelesnik and Partners |
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Spain |
Temporary permissions regime is in place that enables UK firms to provide cross-border services. |
The Spanish Government has recently enacted the Royal Decree-Law 38/2020 of 29 December, which establishes a framework to ensure the continuity of contracts for financial services provided in Spain by financial institutions established in the UK.
The following rules are of particular note: Transitional period UK authorised firms are able to continue to carry out services that are necessary to ensure the orderly termination or transfer of contracts signed before 1 January 2021, where those services are provided to entities duly authorised to provide financial services in Spain under the terms foreseen in the contract. This regime lasts until 30 June 2021. Validity of contracts after the end of the Transitional Period Contracts for the provision of financial services under which a UK authorised firm provides services in Spain (for both professional clients and retail clients), and which have been entered into prior to 1 January 2021, shall remain in force under the terms provided for in the contract, and the UK authorised firm can carry out the activities that are necessary to ensure the orderly termination or transfer of these contracts until 30 June 2021 subject to the following rules:
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Luis de la Pena T. +34 91 514 52 00 Garrigues
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Sweden |
There is a temporary permissions regime that would enable UK firms to provide cross-border services, which applies in relation to professional clients and own account business only.
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The Swedish government has published an amendment to the previously adopted Brexit temporary regime, extending its validity by one year. This means that firms that that are licensed in the UK and who had exercised the right to provide services in Sweden (on the basis of the so-called passport regime) before 29 March 2019, can continue to provide investment services and ancillary services covered by their authorisation in relation to Swedish professional clients with whom the UK firm had an agreement in place on 29 March 2019, until the end of 2021. In addition, the Swedish government has adopted another provision as part of the temporary permission regime, which was not part of the previously adopted regime. This new provision sets out an exemption relating to UK firms whose sole investment activity in Sweden is trading on their own account on a marketplace. Provided that such a firm had exercised the right to provide services in Sweden (on the basis of the so-called passport regime) before 29 March 2019, the trading takes place through direct electronic access on a marketplace and the trading is covered by the firm’s authorisation in its home jurisdiction, then such trading is allowed without having a Swedish authorisation in place until the end of 2021. |
Niclas Rockborn Rikard Sundstedt Gernandt & Danielsson
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