Asset Management | Temporary licensing relief in Norway for UK investment firms to remain in force until 1 April 2023

A temporary regulation which allows UK firms (investment firms and credit institutions) to continue providing cross-border services under the Markets in Financial Services Directive (MiFID) in Norway after Brexit came into force on 1 January 2019 and was supposed to remain in force until 1 January 2023. The Norwegian Ministry of Finance has now prolonged the end date until 1 April 2023 and also invites interested parties to provide feedback on the need for more permanent arrangements.

The background for the temporary regulation was the EU-UK withdrawal agreement ending 31 December 2020. The temporary regulation has allowed UK firms (investment firms and credit institutions) to continue to provide cross-border services under MiFID in Norway after entry into force of Brexit. The temporary regulation is limited to services to eligible counterparties and per se professional clients in Norway and only applies to UK firms that had passported their services into Norway prior to 31 December 2020.

The term of the temporary regulation has now been prolonged until 1 April 2023. The scope of the regulation remains unaltered (i.e. limited to investment services under MiFID provided to eligible counterparties and per se professional clients and only available for UK firms that have validly passported such services into Norway prior to 31 December 2020). There is no need to notify Norwegian authorities when availing of the temporary regulation.

The Ministry of Finance also announces that it shall, before 1 January 2023, assess whether it is appropriate to further extend the temporary regulation or introduce more permanent measures for investment firms established outside of the EU. The Financial Supervisory Authority of Norway (the FSAN) has assessed the need for more permanent measures and is opposed to the introduction of these. The Ministry of Finance nevertheless invites interested parties to provide their views before 4 November 2022, by sending an email to postmottak@fin.dep.no and marking it with “22/5557”.

Our view

Prolonging the temporary regulation provides some additional time for the assessment of any permanent measures, but we would not be surprised if we are looking at additional extensions as the timing seems tight.

When it comes to whether or not permanent measures will be introduced, this will depend on the feedback that the Ministry of Finance receives, notwithstanding the negative view of FSAN.