Passporting of financial services is a European Union mechanism which allows for firms authorised to provide financial services in one jurisdiction to provide them in another without the need for authorisation in this second jurisdiction. This it can do by establishing a branch or providing cross-border services. In order to do this the firm is required to notify its home member state supervisory authority that it wishes to provide these services in a named jurisdiction.
Firms who are authorised by the Financial Services Commission have the right to passport their banking, investments and insurance services throughout the European Union & European Economic Area. Gibraltar is incorporated into the European Union by virtue of the United Kingdom’s membership. Under Article 299(4) of the Treaty of Rome – which established the European Community – the provisions of the Treaty of Rome are applied throughout the European Territories for whose external relations a Member State is responsible.
Within the European Union there are various treaty provisions, directives, regulations and decisions which require competent authorities to communicate with each other. For these purposes the FSC is the competent authority in terms of regulated financial services activities. While, as the competent authority, the FSC would normally communicate directly with other competent authorities within the European Union, Spanish sovereignty claims over Gibraltar and their consequential non-recognition of Gibraltar institutions require a slightly different process. For further detailed information please follow the following link: http://www.fsc.gi/international/passporting.htm