ESMA has published a set of principles that the regulators in the “EU27” should follow when assessing applications from UK institutions seeking an EU authorisation post-Brexit. Key principles include:
- that no authorisation will be automatically “grandfathered”;
- that no institutions should be able to operate as a “letter-box” – so all outsourcing and delegation must be done only under strict conditions;
- the local regulator should make sure it understands why the business wants to relocate; and
- the local regulator should ensure substance requirements are met.
ESMA plans to follow up this initial opinion with detailed guidance for each sector in the financial markets.