November 18, 2018

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FCA Publishes Approach to Becoming UK-Recognized Overseas Investment Exchange & FCA Releases New Video on Senior Managers and Certification Regime

FCA Publishes Approach to Becoming UK-Recognized Overseas Investment Exchange

On September 14, the UK Financial Conduct Authority (FCA) published a statement and direction clarifying how a market operator based in the European Economic Area (EEA) may make an application to become a recognized overseas investment exchange (ROIE), following the United Kingdom’s departure from the European Union (Brexit).

The FCA has made the direction in order to enable the participation of an EEA exchange in UK markets, should they no longer be able to rely on passport rights under the revised Markets in Financial Instruments Directive (MiFID II) after Brexit.

The statement accompanying the direction explains that HM Treasury is not planning a temporary recognition regime for EEA market operators in the event the United Kingdom leaves the European Union without a deal without an implementation period. This is in contrast to the approach taken in relation to other EEA market participants, who may be able to rely on a planned temporary permissions regime to carry on regulated activities in the United Kingdom following the withdrawal (for further details, see the July 27 edition of Corporate & Financial Weekly Digest).

EEA market operators who currently make use of passport rights may, therefore, wish to apply to be recognized as an ROIE. EEA market operators who do not maintain a permanent place of business in the UK may be able to rely on the overseas persons exclusion, following the UK’s withdrawal from the European Union, to the extent that they would otherwise be deemed to be carrying on a regulated activity in the United Kingdom. However, the statement advises that EEA market operators who cannot rely on such exclusion and who undertake regulated activities in the United Kingdom should seek appropriate FCA permissions, such as recognition as an ROIE.

The direction itself clarifies the FCA’s expectations of EEA market operators when applying for recognition as an ROIE. The FCA notes that it has streamlined the application requirements where possible, considering that EEA market operators are subject to MiFID II.

FCA’s statement is available here.

The direction is available here

FCA Releases New Video on Senior Managers and Certification Regime

On September 10, the UK Financial Conduct Authority (FCA) released a video focused on the Senior Managers and Certification Regime (SM&CR).

The video emphasizes the importance of clarity of responsibilities and maintaining high standards under the SM&CR. For further details on the SM&CR, see the July 28, 2017 edition of Corporate & Financial Weekly Digest.

The FCA’s video can be viewed here.

©2018 Katten Muchin Rosenman LLP


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...