On 14 September 2018, the FCA published a direction pursuant to section 287(2) of the Financial Services and Markets Act 2000 (the Direction) regarding  how an overseas market actor can apply to be a recognised overseas investment exchange (ROIE). The Direction enables the participation of the exchange in UK markets, should market actors no longer be able to rely on MiFID II passport rights once the UK leaves the EU.

A press release clarifies that the Treasury is not planning to put in place a temporary recognition regime for EEA market operators in the event that the UK leaves the EU without an agreement and without entering an implementation period, and as such EEA market operators would need to be recognised as an ROIE.

The Direction outlines that all applications should be made under REC 6 of the FCA handbook, and should include a regulatory business plan, and a letter from the applicant confirming certain compliance duties (set out in full in the Direction). The Direction further notes that applications by EEA market operators should include explanatory material referred to in REC 6.2.4G (an equivalence analysis) in relation to certain recognition requirements outlined in the Direction.