Brexit: Changes to temporary licensing relief for UK investment firms

Under the EU-UK withdrawal agreement, the EU granted the UK a transition period, ending on 31 December 2020. The Norwegian Ministry of Finance has now amended the temporary regulation providing an additional transition period for investment services under the Markets in Financial Instruments Directive (MiFID).

A temporary regulation which allows UK firms (investment firms and credit institutions) to continue providing cross-border services under the Markets in Financial Instruments Directive (MiFID) in Norway after Brexit came into force on 1 January 2019. The temporary regulation was limited to services to eligible counterparties and per se professional clients in Norway. Further, the temporary regulation only applied to UK firms that had passported their services into Norway on 12 April 2019.

On 11 November 2020, the Norwegian Ministry of Finance amended the temporary regulation. The temporary regulation shall now be (i) automatically rescinded on 1 January 2023, and (ii) available for UK firms that have passported services into Norway before 31 December 2020. The scope of the regulation remains otherwise unaltered (i.e. investment services under MiFID provided to eligible counterparties and per se professional clients).

Our view

The amendment provides much needed predictability for market participants as it grants UK firms a full two-year period to adjust to a new third-country regime.