The European Securities and Markets Authority (ESMA) has published an opinion setting out general principles aimed at fostering consistency in authorisation, supervision and enforcement related to the relocation of entities, activities and functions from the UK. The opinion is addressed to the national competent authorities, in particular those EU Member States that will remain in the EU (EU 27).
The opinion states:
- that new authorisations must be granted in full compliance with EU law and in a coherent manner across the EU 27;
- no recognition of authorisations granted by third country authorities is foreseen in EU law. Similarly, and although the UK enjoys full rights as an EU Member State until it withdraws from the EU, there cannot be any automatic recognition of the authorisation granted by the UK regulator into the EU 27. This is not foreseen in EU law, nor would the conditions of authorisation in this context be identical to those which the UK authorities had to examine before granting an authorisation;
- any outsourcing or delegation arrangement from entities authorised in the EU 27 to third country entities should be strictly framed and consistently supervised;
- outsourcing or delegation arrangements, under which entities confer either a substantial degree of activities or critical functions to other entities, should not result in those entities becoming letterbox entities nor in creating obstacles to effective and efficient supervision and enforcement;
- ESMA will establish a forum – the Supervisory Coordination Network – to allow national competent authorities to report on and discuss cases of relocating UK market participants; and
- ESMA intends to develop sector-specific opinions in areas such as those concerning asset managers, investment firms and secondary markets.