Treasury is consulting on the post-Brexit market access arrangements between the UK and Gibraltar. Constitutionally, Gibraltar is an Overseas Territory with internal self-government. Responsibility for financial services lies with its elected Government.
From an EU point of view, Gibraltar was not a Member of the EU in its own right, nor party to the EEA agreement. Currently, as with the UK, EU law applies during the transition period. But, as between the UK and Gibraltar, a separate regime has always applied, based on the EU passport model.
The Government now proposes a new Gibraltar Authorisation Regime, that will allow Gibraltar-based firms to be treated as “authorised persons” for the purposes of FSMA, provided the activities are covered by a statutory instrument that will set out the requirement that the firm be authorised in Gibraltar to carry them on. Treasury expects the activities will be a subset of regulated activities, that reflect the composition of Gibraltar firms that currently do business in the UK. The GAR will also be contingent on the UK and Gibraltar regulatory systems remaining aligned, and be subject to appropriate MoUs.
Practically, the regime will work on the basis of notifications via the GFSC, which will have the power to withhold consent or place restrictions on permissions. The process should take 2 months.
The consultation also covers proposals for Gibraltar firms to participate in certain sub-classes of the FSCS, the alignment assessment process, and orderly wind-down of current cross-border business.
Consultation closes on 11 May.