The GFSC's Role Under the EU (Withdrawal) Act 2019
The EU (Withdrawal) Act 2019 (the Act) repeals the European Communities Act 1972, converting and preserving the acquis communitaire (EU law) into domestic law.
The Act gives Ministers and the GFSC powers to address any deficiencies in financial services legislation and regulation resulting from Gibraltar’s exit from the EU. The Minister will make regulations that address the effect of a no-deal scenario on financial services.
As a general principle, EU member states will be treated as third countries, although there may be instances where the Government will deviate from this general approach in order to provide for a smooth transition. The GFSC will adopt the same approach to ensure alignment with the new regime and to support our strategic and operational objectives.
Temporary Permissions Regime and Financial Services Contracts Provisions
In the event of a no-deal scenario, the Government announced the introduction of a Temporary Permissions Regime (TPR) that will permit EEA firms that currently passport into Gibraltar to continue to do so for a limited period. This will allow firms wishing to maintain their Gibraltar business to apply for full authorisation from the GFSC.
EEA firms and funds that operate in Gibraltar and want to utilise the TPR will need to inform the GFSC.
Within the proposed changes the Government has also ensured continuity of pre-existing contracts through the Financial Services Contracts Provisions (FSP).
More information on the TPR and FSP can be found here.
Legal changes post-Brexit
The Act gives Ministers the power to issue regulations to prevent, remedy or mitigate any failure of EU law to operate effectively. Any subsequent changes to regulation will reflect Gibraltar’s new position outside of the EU and will provide for a smooth transition. The Government does not intend to use this power to make any substantive policy changes.
The GFSC will have the power to make binding rules to address any deficiencies arising from Gibraltar’s exit from the EU, subject to Ministerial consent. This will include addressing any issues with the application of level 2 and level 3 EU law, such as EU Binding Technical Standards and Guidelines.