Services under MiFID II / MiFIR are subject to a licence from an EEA National Competent Authority
The definition of provision of services within the EEA includes either the procurement of such services or the marketing and promotion of such services to an individual or a legal entity domiciled or registered in an EEA member state, irrespective of the fact that such services are being conducted or promoted out of the UK, by a UK firm or by personnel employed in the UK. In this respect, it is important to stress that the spontaneous solicitation of a UK firm by a resident of the EEA, generally known as “reverse solicitation”, does not entitle such UK firm to provide the services without a licence delivered by an EEA regulatory authority when carried out as a regular occupation or business on a professional basis. While investment firms may benefit from certain limited exemptions, other firms such as payment services providers and credit institutions cannot.
There are no reasons to delay the implementation of an EEA consistent setup
As important as the urgent warning to file for an EEA licence to operate is, obtaining such licence should not be a burden and the process can be greatly facilitated with the assistance of knowledgeable professionals and regulatory specialists.
UK firms already complying with the FCA/PRA licensing requirements should not be overly worried about satisfying the conditions of an EEA licence. The principal issue is to act in due time, in order to avoid facing claims for illegal practice which could have disastrous consequences on customer confidence.
Most National Competent Authorities in the EEA, such as for example the Autorité de Contrôle Prudentiel et de Résolution (ACPR) in France, have already declared during the Brexit transition period that they would allocate task forces to respond to the surge of licensing applications and that they would treat fairly any late application.