EMA responds to EBA Consultation on Passporting under PSD2
See the EBA consultation details here.
The EMA has responded to the EBA’s consultation on regulatory technical standards (RTS) on the framework for cooperation and exchange of information between competent authorities for passport notifications under PSD2. These draft RTS set out templates for passporting, services passporting, agent passporting, and establishment passporting. They also set out a template for distributor passporting. These templates could have a significant impact on PSPs passporting to other EU Member States, including where any services are outsourced to another EU Member State.
The EMA’s response welcomes the standardisation of passporting notifications, as this may improve efficiencies for both regulators and firms. However, there are a number of concerns raised by the EMA in the response.
PSD2 provides for two types of passporting to be undertaken. These are based on the principle of mutual recognition set out in the Treaty of the European Union (“Treaty”). The first is freedom to offer services and the second is the right of establishment. However, the draft format conflates these concepts by requiring one form for both. Not only is this unhelpful from an administrative perspective, but it may result in Member State authorities treating passport entities as established entities. The EMA has accordingly proposed:
– that two forms are used – one for passporting under Freedom of Services, and one for Freedom of Establishment
– a separate, third form should be used for the outsourcing of services
– a definition of “distributor” would help distinguish between agents and distributors in terms of operation and legal responsibilities.
Read the EMA response here.