RO1 EEA Rules

Question 1

When did the UK leave the EU?

Answer 1

Jan 2020, with a transition period up until Dec 2020.

Question 2

What is the loss of pasporting rights?

Answer 2

The loss of the UK/EEA financial services firms’ ability to sell products and services to clients in the EEA/UK.

Question 3

Which companies find the loss of passporting rights the hardest?

Answer 3

Insurance companies.

Question 4

How are passporting rights being managed?

Answer 4

By an agreement to carry on servicing each others customers.

Some UK insurers operate out of their EEA subsidiaries.

Allowing EEA firms to operate out of UK branches and service their UK customers for a 15-year ‘run off period’.

Question 5

Where have the difficulties come from working with the EEA and why?

Answer 5

UK companies servicing their EEA customers.
The different European countries have different rules for dealing with UK insurers.

Question 6

How are the UK and EU combating difficulties with Brexit?

Answer 6

Established a Memorandum of Understanding to find some form of equivalent regime, which both sides have agreed but is not yet EU law.

Question 7

As it stands, is the uk more or less aligned with the EU?

Answer 7

More

Question 8

How much FCA policy comes from the EU?

Answer 8

70% and many are now UK law.

Question 9

What is the term onshoring?

Answer 9

The process of converting and amending EU laws and regulations to be fit for purpose in the UK.

Question 10

What is Temporary Transitional Powers?

Answer 10

The temporary provisions the UK treasury has given UK regulators to help implement financial services legislation.

Question 11

What may result due to onshoring?

Answer 11

Many EU regulatory initiatives will remain in the UK.

Question 12

Why should you keep an eye on the EU area of study?

Answer 12

Negotiations are still ongoing on the longer term impact of BREXIT.

Question 13

Under the EU directive, what was possible.

Answer 13

A regulated firm that had its headoffice EEA state could carry out regulated services in another EEA state.

Question 14

What is still possible regarding EU law?

Answer 14

UK firms could passport to Gibraltar. Valid until December 2022. May have been extended.

EEA firms passporting into the UK will receive ‘deemed’ part 4A permission. Can continue to trade in the UK whilst they wait for authorisation with part 4 permission.

Question 15

What is the EEA?

Answer 15

The European Economic Area

Question 16

When was the EEA created, and what for?

Answer 16

1/1/1994

Allow Norway, Iceland, and Liechtenstein to join the single market without becoming EU states.

This means they have to implement some EU laws within their domestic markets.

Question 17

How many EEA states are there?

Answer 17

30

Question 18

What state is not a full member of the EEA or EU?

Answer 18

Switzerland.

Question 19

What states are not a member of the EEA or EU?

Answer 19

The chanel Islands and Isle of man.

Question 20

What is different about Gibraltar?

Answer 20

It has a separate status to the EU and EEA, and so the insurance distribution directive (IDD) and MIFID rules apply in full.

Question 21

What is MIFID?

Answer 21

Markets in Fiancial Instruments Directive 2

Question 22

What are M2G 1 and 2

Answer 22

M2G 1: Onshoring for trading venues and data reporting services

M2G 2: Onshoring of senior management arrangements, and systems and control obligations.

Question 23

What must key features, key information, and key investor information now include?

Answer 23

Performance changes.

The method of calculating past performance scenarios.

This is set by the FCA so not to give overly optimistic impressions of future performance.

Question 24

What are the 4 changes in FSCS since BREXIT?

Answer 24

UK branches of EEA Authorised Deposit Taking Firms now UK authorised and protected by FSCS.

EEA branch deposits of a UK firm not covered by the FSCS. Should be covered by a deposit guarantee scheme of EEA state and will depend on what is in place.

Passporting rights ceased- EEA backs need to apply for authorisation. Can apply for the Temporary Permissions Regime whilst waiting.

FSCS protection depends on where authorised and where they hold deposits.

Question 25

What must a fund set up outside the UK do to be promoted in the UK to retail investors?

Answer 25

Be recognised by the FCA a recognised investment scheme or overseas scheme, i.e., Temporary Marketing Permissions Regime.

Question 26

What does the TMPR allow?

Answer 26

Funds based in the EEA that benefited from passporting rights to continue to be marketed in the UK.

This is for 3 years from BREXIT and the treasury can extend up to 12 months at a time.

Question 27

Who supervises credit rating agency regulation due to BREXIT?

Answer 27

The FCA since 31 Dec 2021

ESMA supervises EU agencies.

Question 28

What do uk nationals living in the EEA prior to 1/1/21 have to do tax wise.

Answer 28

Continue as normal.

Question 29

What did citizens of Switzerland and the EU living in the UK prior to 1st Jan 2021 have to do to remain?

Answer 29

Apply to the EU Settlement Scheme by 30th June 2021.

Question 30

What does anyone moving from the UK to the EU Post BREXIT have to do regarding tax?

Answer 30

Continue with social security as they did with EU membership.

If temporary (2 years), they can apply to make contributions to the HMRC UK.

If it is permanent, contributions go to the country they work in. This is the same for an employee coming to the UK.

UK state pension will continue to be paid, and the annual increases will continue as they did when the UK was a member state.

Question 31

If goods are imported from outside the EU do they pay VAT?

Answer 31

Yes

Question 32

How is VAT handled for EU and non EU businesses trading in Great Britain?

Answer 32

Treated the same for EU countries as countries outside the EU.

The rate is normally the same as if the goods had been supplied in the UK.

Question 33

When must overseas traders register for UK VAT in order to charge VAT at the point of sale?

Answer 33

When suppling goods up to the value of £135 (€150) to non-buisness customers.

Question 34

What must businesses that buy certain services from suppliers in other countries do?

Answer 34

Account for VAT by means of a reverse charge procedure.

Question 35

What special VAT rules apply for the movement of goods between GB and NI and between NI and the EU?

Answer 35

Exports of goods from Great Britain are zero-rated.

For Northern Island, zero-rating applies to exports of goods to countries outside the EU.

Question 36

Where else may special VAT rules be found?

Answer 36

For businesses that supply services outside the UK.