Passporting from Gibraltar

Transcription

1 Passporting from Gibraltar Mark Johnson, Country Manager Lloyds TSB Bank (Gibraltar) Limited Frankfurt, May 14 th May 09

2 Life Before Passporting (1) The Treaty of Rome enshrined a desire to create the freedom of movement of Goods; Persons; Services and Capital across the European Economic Community The freedom of movement of financial service lagged considerably behind all other areas due to complexity of national legislation and protectionism of national markets The introduction of the Euro on the 1 st January 1999 began the process of change which lead to the Financial Services Action Plan later in May 09

3 Life Before Passporting (2) The FSAP outlined 6 specific areas which required action to facilitate the concrete moves towards creating a real impetus towards freedom of movement of financial services across Europe: 1. Information & Transparency the European consumer required clear and comprehensive information when investing 2. Redress Procedures an effective mechanism to provide settlement of cross-border disputes 3. Consumer Protection Rules real equivalence across member states 4. E-Commerce the encouragement of e-commerce solutions for financial services consumers 5. Insurance Intermediaries A cross-border market for retail insurance products 6. Cross-border Retail Payments The FSAP identified a need for an intergrated retail payment system for small value cross-border transfers. 2 May 09

4 Financial Services Directive The work of the Financial Services action plan has found its most concrete manifestation in the series of Financial Services Directives which the European Union Commission has brought into being over the last decade. These directives have, to a very great extent, revolutionised the way financial services are sold within the 500m plus market that is the European Economic Area (EEA), by providing pan-european backing to EEA domiciled banks and other financial institutions seeking to do business across this market without needing to conclude bilateral deals with each individual state and regulatory body. 3 May 09

5 Key Directives (1) Banking Consolidation Directive 2000/12/EC This directive brings together 7 earlier banking and capital directives. It secures mutual recognition of authorisation and of prudential supervision systems of credit institutions and means that separate agreements are not required with each regulatory body in the EEA. Banks are allowed to Passport their services on the basis of their Home regulatory licence either via the establishment of a branch in another Host jurisdiction or via the provision of crossborder services. The application process is straightforward in both cases and Host regulators have limited General Good grounds for challenging the passport. Markets in Financial Instruments Directive (MiFID) 2004/39/EC Banks wishing to provide investment advice and sales do not need to apply for a separate investment licence as investment companies do but can provide such via their BCD licences whilst utilising MiFID methodology. 4 May 09

6 Key Directives (2) The Insurance Mediation Directive 2000/92/EC Harmonises the sale and administration of insurance contracts across the EEA including investment linked insurance wrappers The UCITs Directive Provides a common framework for the operation of a pan-european marketing of investment funds established in a member state. The Distance Marketing of Consumer Financial Services Directive 2000/65/EC This directive lays down the framework for common rules for the marketing of financial services across the EEA at a distance. The European Savings Tax Directive 2005/39/EC Ensures European residents of one state are taxed on their deposit income earned in another. Disclosure default or, in certain jurisdictions withholding tax deduction. 5 May 09

7 So why Passport from Gibraltar? Many of Gibraltar s general attractions will have been referred to by previous speakers. From a specifically Passporting perspective, I am mainly informed by my own experience in originally running the Strategic project team within Lloyds Banking Group, which assessed individual jurisdictions across the EU in order to identify a base from which we would be able to service our Group expatriate customers. 6 May 09

8 Gibraltar s Advantages (1) A history of organisation from across the Banking and Insurance fields establishing their Pan-European Passporting bases in Gibraltar to reach out across the EEA Proximity to core markets major clusters of core target markets on the Costa del Sol, the Costa Blanca and the Algarve readily accessible from Gibraltar. There are good Air communications to UK from Gibraltar and elsewhere in Europe from Malaga. A rigorous but helpful regulator Whilst the Gibraltar Financial Services Commission was clear and demanding in it s expectations of our Group, it was also helpful and responsive when the inevitable complexities and delays occurred during the licensing and notification process. Strong links with the UK FSA helped provide comfort to key stakeholders in London. 7 May 09

9 Gibraltar s Advantages (2) A comprehensive network of professional advisors in law, taxation and accountancy who are familiar with the issues facing intending Passporting organisations. A cultural melting pot which is essentially bilingual (English and Spanish) provides a ready supply of well educated, Europe-focussed workers Employment costs are very reasonable by comparison with other pan-european financial centres Acceptance of Gibraltar s status as a British Overseas Territory with the same access rights to the EEA as the UK proven by absence of an obstructive challenge by EEA regulators to Lloyds Banking Group notifications 8 May 09

10 Conclusion I hope that I have been able to explain the benefits afforded by the EU Financial Services Directives, and specifically the particular advantages basing a Passporting operation in Gibraltar presents. Should you wish to see a list of organisations currently Passporting in the Banking Consolidation Directive from Gibraltar, please consult the GFSC website where they are listed. Should you wish to know more about my own experiences, both leading up to Passporting and running the live business since last year, please do not hesitate to contact me at the end or by Marka.Johnson@lloydstsb.gi 9 May 09

11 G I B RALTAR Wealth Management Seminar May 2009 Frankfurt NEXT