EAPB position on Passport under MiFID

14 February 2007

The EAPB issued its response on CESR’s consultation paper on the passport under MiFID lining out that it is difficult to answer CESR’s questions due to the ambiguity with regard to MiFID provisions applicable to branches. “It is unclear in which circumstances services are provided by the branch “within its territory” as set out in Art 32 (7) MiFID. In particular, the extent of this provision is unclear in those circumstances where a customer is located outside the Member State the branch has been established, EAPB notes.

EAPB is of the opinion that it should not be decisive that the customer is not located in the same Member State as the branch. In practice, this would create a situation where, within a branch, different legal regimes would be applicable, i.e. the host regime for customers within the Member State where the branch has been established and the home regime for all other customers. Furthermore, such a situation may lead to “double” supervision.

From an investor protection point of view it should be decisive whether the relationship to the customer is dominated by an activity in the host Member State.

Full response

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