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Global Trustee and Fiduciary Services News and Views | MiFID II Special Edition 2016
45
establish a branch in a Member State under
a MiFID II Directive EU passport. Unlike an
EU investment firm, however, there is no
express home/host Member State division
of supervisory powers. Rather, the limit of
any Member State supervision lies in the
fact that not all of the MiFID II Directive
applies to third country firms. However,
regulatory capital and organisational
requirements do apply. Even though the
MiFID II Directive prohibits Member States
from imposing any additional requirements
on the organisation and operation of the
branch of a third country firm, the fact is
that the requirements themselves are cast in
broad terms. This means that the regulatory
burden, ultimately, on the subsidiary of a
MiFID entity or AIFM could be similar to that
on the branch of a MiFID entity without the
related rights as discussed below.
• Even though the MiFID II Directive provides
greater scope for the provision of the
investment services than MiFIR, in so far
as the branch of a third country firm can
provide investment services to elective
professional clients and retail clients
(in addition to eligible counterparties and
per se professional clients) in the Member
State in which it is established, it does not
give the branch the right to provide these
services to anyone in other Member States.
Time to think . . .
Whatever the solution, the victory won for UK
managers as EU AIFMS wanting to passport
their segregated mandate services under
the AIFMD will be relatively short-lived if the
UK’s post-Brexit settlement renders the UK a
third country and the AIFMD is not amended.
That said, Brexit is still a way off if the current
indications on the likely date for notifying the
EU Commission remain.
Andrew Henderson
Partner
Eversheds LLP
1
See MiFIR, Article 54.1.