Gibraltar: UK Releases Post-Brexit Financial Services Guidance
by Jason Gorringe, Lowtax.net, London
02 September, 2019
The UK Government has newly tabled two regulations that are intended to ensure that Gibraltar-based financial services firms continue to have access into UK markets, once the UK leaves the EU, in a no-deal scenario.
These regulations are the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 and the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019.
In March 2018, at the Joint Ministerial Council with the Government of Gibraltar, the UK Government announced that Gibraltar's authorized financial services firms will continue to be able to access the UK as now until 2020 in a no-deal scenario. UK firms will also continue to be able to exercise their passport rights as now in Gibraltar.
Gibraltar is a British Overseas Territory and is in the EU as part of the UK's membership. Gibraltar applies EU law under provisions in its own European Communities Act 1972. Following the result of the EU referendum, Gibraltar will be leaving the EU in parallel with the UK. The Government of Gibraltar will undertake its own contingency preparations for Gibraltar's withdrawal from the EU, including adopting a similar and reciprocal approach to the UK in its own Brexit legislation.
The two regulations will make amendments to UK primary and secondary legislation related to financial services passporting rights between the UK and Gibraltar to ensure that Gibraltar-based financial services firms continue to have access into UK markets.
The UK Government has committed to work closely with the Government of Gibraltar to design a long-term framework for market access beyond 2020.
According to the UK Government, the intention of these two regulations is to reflect the UK and Gibraltar's new positions outside the EU, to preserve current market access, and regulatory treatment to the extent possible, and to smooth the transition to the new position.
The Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 intends to ensure that the pre-exit regulatory arrangements that applied between the UK and Gibraltar are appropriately preserved when the UK leaves the EU. It will make specific amendments to EU-derived financial services legislation that applied before exit where, but for the amendments, the provisions that supported market access or regulatory cooperation would no longer apply. More generally, it will contain a savings provision, applicable to specified areas, that seeks to ensure that:
- UK firms doing business with Gibraltar firms or in connection with Gibraltar entities;
- Gibraltar-based firms doing business in the UK;
- Gibraltar trading venues and financial instruments admitted to trading in Gibraltar or traded on a Gibraltar trading venue;
- provisions that relate to arrangements between UK and the Gibraltar regulators,
continue to be treated in UK law as they were treated before exit day.
The miscellaneous amendments regulations will make provisions to maintain existing treatments for depositor and policyholder protection, and the payments regime governing euro transactions between the UK and Gibraltar, among other UK-Gibraltar financial services arrangements.
HM Treasury plans to lay the two statutory instruments before Parliament before exit.
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