Anyone working for a UK firm, with UK customers, but living in EU needs to identify authorisation from EU regulator in case of no deal Brexit, network tells adviser firm
The Right Mortgage Network has informed two EU-based UK protection advisers that they will be suspended if Britain leaves the EU without a deal unless passporting has been authorised with their local regulator, even though they are not working with EU clients, COVER can exclusively reveal.
As part of its formal preparations for Brexit, the network is demanding - as a regulatory requirement - that the advisers seek authorisation from their local EU regulators to ensure passporting rights are in place - or confirm in writing that authorisation is not needed - in anticipation of a no deal Brexit on 31 October.
It is currently unclear how many other advisers are affected by similar circumstances across the network or at other networks.
In correspondence sent by the network, seen by COVER, The Right Mortgage said each ‘home' state regulator will need to be approached directly by any advisers operating abroad in the EU. It said it is likely each individual selling UK products to UK customers from an overseas office will require permission in that country.
The network said that should Britain leave without a deal on 31 October, and individual passporting permissions have not been agreed with the local EU authority, its advisers based in that region selling protection to UK clients will not be able to continue. Affected advisers will be suspended until passporting is reinstated, or written confirmation has been received, The Right Mortgage has said.
Roy Allaway, who runs Hart Securus Whole of Market Life Insurance, an appointed representative firm at The Right Mortgage, has been informed that two of his advisers working outside of the UK will need to secure written authorisition from their local EU regulators or otherwise be suspended if the UK leaves without a deal. "Two of my advisers have been told they are to be suspended from the network, it's heartbreaking, we're being told that because of Brexit, they cannot work," he told COVER.
Allaway added that despite getting verbal confirmation that the EU regulators in question do not regard this type of business as regulated activity, getting written confirmation from them is proving difficult. "We cannot get that easily as no one is putting pen to paper but we are actively pushing for it."
When approached by COVER, The Right Mortgage were not available for comment.
The Financial Conduct Authority (FCA) told COVER that there is an "ongoing dialogue" with local regulation authorities across the EU, however added that there is "no centralised one-size-fits-all approach" to passporting rights across EU member states.
The FCA's advice to advisers living in the EU is to seek legal advice with their local authority during the transition period to find out what constitutes regulated activity in their eyes.
EU firms looking to achieve passporting rights into UK can apply to the FCA via the temporary permissions regime.
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