Germany Proposes Very Limited Temporary Permission Regime in Case of a Hard Brexit

27 November 2018
View Debevoise Update
Key takeaways:
  • The German Ministry of Finance has published draft legislation to smooth the transition in case of a hard Brexit.
  • Under the draft Act, UK insurance companies, credit institutions and investment firms will be able to apply for “temporary permission”. Such permission could last until the end of 2020, although it will be limited in scope, and is intended to apply only to legacy business to prevent a “cliff edge” scenario. The German regulator would be able to decide on case-by-case basis whether to grant the temporary permission and can withdraw it at any time.
  • Generally, the draft Act only covers services provided by UK insurance companies, banks and financial services firms in the course of winding down their German business, or in the course of making arrangements to continue operations in line with either local laws or the rules for market participants from outside the EU.
  • The draft Act does not cover UK fund managers marketing funds in Germany under the European marketing passport.