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Law
Gibraltar’s unique passport for EU access to the UK
By Valerie Holliday and James Lasry, Financial Services Partners, Hassans International Law Firm
The financial services industries including banking, insurance, investment and fund management, have always played an important role in both the UK’s and Gibraltar’s economies. Much of this business has been cross-border with other EU Member States, often using the EU financial services passporting regime. Brexit has put an end to this such that UK firms can no longer do business in the EU on the basis of their home state licenses. Neither, indeed, do EU firms have direct access any longer to one of the world’s greatest capital markets. Clearly alternative solutions must be found. Luckily, Gibraltar is able to offer opportunities through its ongoing passport regime with the UK.
The reality is that many companies must address their loss of market access to the UK which they have enjoyed under EU
passporting rights. Clearly, one option is for EU firms to set up in the UK and go through the FCA regulatory licencing processes. Prior to Brexit, there were c 6,000 financial services companies that passport into the UK from the EU. It is easy to see how the regulatory bottlenecks may be tight for new applications at the UK regulators. The risk of losing revenues is very real.
Gibraltar is now the only jurisdiction in the world that enjoys passporting rights into the UK. The origins of the Gibraltar UK financial services passport actually stem from an anomaly in EU legislation which provided for passporting only between member states. Gibraltar, although a separate jurisdiction from the UK, with its own legislature and financial regulator, was considered as the same Member State in the context of EU legislation. This meant that Gibraltar firms could passport
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