The Permissions regime introduces the concept of a firm holding one permission to carry out financial services in one or more regulated activities.
What does this mean for existing firms?
This means that firms will no longer hold a licence or authorisation to carry out financial services. Under the Financial Service Act 2019 (the Act) this will be replaced by a permission to carry on specific regulated activities.
For existing firms this means that currently active licences, authorisations, approvals or registrations will be transitioned over to the Permissions Regime, i.e. that a firm will hold one permission to carry out one or more regulated activities.
There will be no change to the actual activity a firm is permitted to carry out. This will remain the same, albeit the terminology used to refer to these activities, will change.
For example, a credit institution that currently holds a banking licence will be referred to under the new Act as having a permission to carry out the regulated activity of “Accepting deposits”.
Schedule 2 of the Act sets out the different regulated activities and Schedule 3 provides an overview of what these are and the types of firms that they apply to.
The below table illustrates some examples of how current activities have been mapped to the regulated activities:
Type of Firm
What happens NOW
What will happen under the Act
Licence under the Financial Services (Banking) Act
One permission to carry out the regulated activity: Accepting Deposits
Authorisation issued under the Financial Services (Markets in Financial Instruments) Act
One permission issued to carry out one or more of the regulated activities:
· Reception and transmission of orders
· Execution of orders on behalf of clients
· Dealing on own Account
· Portfolio Management
· Investment Advice
· Underwriting or placing on a firm commitment basis
· Placing without a firm Commitment basis
· Operation of an MTF
· Operation of an OTF
Licence under the Financial Services (Insurance Companies) Act
One permission to carry out the regulated activity: Effecting or carrying out contracts of insurance.
Licence under the Financial Services (Collective Investment Schemes) Act 2012
One permission to carry out the regulated activity:
Acting as administrator of a collective investment scheme.
Bureau de change
Licence under the Financial Services (Investment and Fiduciary Services) Act
One permission to carry out the regulated activity:
Acting as a bureau de change
An overview, to understand how the services have been mapped, is provided here.There will be no change to the scope of activity a firm can carry out. Firms can continue providing the same services as they do now once the Act comes into effect.
A firm can carry out multiple regulated activities spanning various industry sectors. In this case the firm is issued with one permission to carry out the various regulated activities.
For example banking and fund depositary services. In this case, one permission would be issued to carry out the regulated activities:
• Accepting deposits
• Acting as a depositary of a UCITS
• Acting as depositary of an AIF
The same exemptions that are in place currently, in relation to restrictions on multiple activities, will still apply. For example, insurance companies can only carry out the regulated activity - effecting or carrying out contracts of insurance.
GFSC Test Register
We have developed a TEST GFSC Register to allow firms to see what the Firms Register will look like once the Act comes into force.
Firms’ current licences, authorisations, approvals and registrations have been mapped across to regulated activities and services under the Act.
Please note that we continue to work on what information is presented and at this stage the Test Register is to be used for illustrative purposes only.
Please note that passporting services are currently not showing on the TEST Register and that these will be added in due course.
Any feedback can be sent to our LRP team at LRP@fsc.gi
There will be no change to the services a firm can passport from Gibraltar to other EU countries. The same applies to firms that passport into Gibraltar.
Firms are not required to resubmit passport notifications for existing arrangements already notified to us.
For new notifications, the existing forms will continue to be used.
Once the new Act comes into effect, firms will be regulated under a new Act and will be issued with a new Permission number.
This will have implications on current information and marketing material already published by firms. Best efforts are to be made to ensure that information is correct and updated where the Act and regulated activities need to be referenced. Where new information is printed, it will be expected that this includes updated information.
Once the Financial Services Act is enacted and the permissions come into effect, firms will be grandfathered into the new regime. This will be at no cost to firms.
We do not intend to issue a permission letter to existing firms as such will be transitioned over to the new Act and continue providing the same financial services as currently.
We will issue firms with details of the permission number, under the Act, in early January. Details of the regulated activity and services under the Act will be available on our website Firms Register.
If you require a hardcopy record of the regulated activities that your firm can carry out, please let us know.