Navigate EU Regulation as a UK Firm
Post-Brexit, UK and EU financial regulation are diverging. Passporting is gone. Equivalence is partial. MiCAR, SFDR, and DORA have no UK equivalents. For UK firms with EU clients or operations, dual compliance is now the reality.
Key Areas of UK-EU Regulatory Divergence
Since Brexit, the UK and EU have taken different approaches in several major regulatory areas. Understanding these differences is critical for firms operating cross-border.
Crypto-Assets
EU
MiCAR: comprehensive EU-wide CASP authorization with passporting. In force from 30 December 2024.
UK
FCA crypto registration for AML purposes. Broader regulatory framework under the Financial Services and Markets Act 2023 (FSMA 2023) still being developed. No CASP-equivalent passport.
UK-authorized crypto firms cannot passport into the EU under MiCAR. Separate CASP authorization required for EU market access.
Sustainability Disclosures
EU
SFDR: entity-level and product-level disclosure framework. Article 6/8/9 classification. PAI reporting. Taxonomy alignment disclosure.
UK
SDR (Sustainability Disclosure Requirements): anti-greenwashing rule in force, investment labels regime (Sustainability Focus, Improvers, Impact, Mixed Goals) from 2024-2025. Different taxonomy approach.
UK firms marketing in both markets must comply with both SFDR and SDR. The classification systems are not equivalent — an SDR label does not map directly to an SFDR article classification.
Investment Services
EU
MiFID II/MiFIR as amended (EU version). Third-country regime under MiFIR Article 46 requires equivalence decision.
UK
UK MiFID (onshored). Overseas Persons Exclusion (OPE) allows some cross-border activity. FCA Temporary Marketing Permissions Regime ended.
UK firms lost automatic EU market access. Accessing EU clients now requires authorization in an EU member state or reliance on individual member state third-country regimes.
Fund Management
EU
AIFMD II (transposition by April 2026). UCITS. Full marketing passport for EU-authorized managers.
UK
UK AIFMD (onshored). No changes equivalent to AIFMD II. Overseas Fund Regime (OFR) allows recognized EU funds to be marketed in the UK.
UK AIFMs cannot passport fund marketing into the EU. Must use NPPRs in each target EU member state or establish an EU AIFM.
Operational Resilience
EU
DORA: prescriptive ICT risk management, incident reporting, resilience testing, and third-party ICT provider oversight framework. In force from January 2025.
UK
FCA/PRA Operational Resilience framework: outcomes-based approach focused on important business services and impact tolerances. Senior Managers Regime (SM&CR) for individual accountability.
Both regimes require operational resilience, but with different approaches. Dual-regulated firms must satisfy both DORA (prescriptive, ICT-focused) and UK rules (outcomes-based, broader scope).
Consumer Protection
EU
MiFID II conduct rules, PRIIPs (Key Information Documents), Insurance Distribution Directive (IDD).
UK
Consumer Duty (in force July 2023): higher standard of care, cross-cutting rules on avoiding foreseeable harm, supporting customer understanding, and delivering good outcomes.
UK Consumer Duty goes further than EU conduct rules in some areas. Firms operating in both markets need to meet the higher standard where applicable.
EU-UK Equivalence Decisions
Equivalence decisions determine whether UK regulatory standards are considered comparable to EU standards. The status varies by sector and is subject to change.
| Area | Status | Detail |
|---|---|---|
| Central Counterparties (CCPs) | Granted (temporary, extended to June 2025) | EU recognition of UK CCPs (notably LCH) for euro-denominated clearing. This has been extended multiple times but remains temporary. |
| Credit Rating Agencies | Granted | UK CRAs can be used by EU firms for regulatory purposes. |
| Investment Services (MiFIR Art. 47) | Not granted | No equivalence decision for UK investment firms. This means no EU-wide third-country access under MiFIR. |
| Fund Management (AIFMD) | Not applicable | The AIFMD third-country passport has not been activated for any country. UK managers use NPPRs. |
| Insurance (Solvency II) | Provisional | Provisional equivalence for reinsurance and group supervision. Under review. |
| Banking (CRR/CRD) | Partial | Limited equivalence for specific purposes. UK banks operating in the EU generally require EU authorization. |
Why UK Firms Use financialregulations.eu
Our knowledge base covers both EU-level regulations and UK financial legislation, enabling side-by-side analysis.
- Compare EU and UK regulatory requirements on the same topic
- Research MiCAR, DORA, SFDR, and other EU frameworks that affect cross-border UK firms
- Understand third-country access provisions for UK firms in each EU framework
- Get cited answers from FCA Handbook, FSMA 2000/2023, SM&CR, and Consumer Duty sources
- Upload policies or compliance documents for review against both EU and UK requirements
Example Questions
- How does a UK firm obtain CASP authorization under MiCAR?
- What are the differences between SFDR Article 8 and SDR Sustainability Focus?
- Does DORA apply to UK ICT providers serving EU financial institutions?
- What AIFMD NPPR requirements apply to a UK AIFM marketing in the Netherlands?
- How do FCA Consumer Duty and MiFID II suitability requirements compare?
Frequently Asked Questions
Can a UK-authorized firm still provide services to EU clients?
Since the end of the Brexit transition period, UK firms lost automatic passporting rights into the EU. Access now depends on the specific regulatory framework: for investment services, there is no MiFIR equivalence decision, so UK firms must either establish an EU entity (subsidiary or branch) or rely on individual member state third-country regimes where available. For fund marketing, UK AIFMs can use National Private Placement Regimes (NPPRs). For banking, UK banks generally need EU authorization.
How does MiCAR affect UK crypto firms with EU clients?
UK FCA crypto registration does not provide any access to the EU market under MiCAR. UK crypto firms wishing to serve EU clients must obtain CASP authorization in an EU member state under MiCAR. There is no equivalence regime under MiCAR for any third country, including the UK. Conversely, EU CASPs do not automatically gain UK market access — they must register with the FCA.
Do UK firms need to comply with both SFDR and SDR?
If a UK firm markets financial products to both UK and EU clients, it must comply with SDR for UK distribution and SFDR for EU distribution. The two frameworks are not equivalent: SDR uses a labeling system (Sustainability Focus, Improvers, Impact, Mixed Goals) while SFDR uses article classifications (6, 8, 9). Firms must maintain separate disclosures for each regime. Some UK firms choose to apply SFDR across all products for consistency when EU distribution is significant.
What is the Overseas Persons Exclusion (OPE) and can UK firms rely on it?
The OPE allows non-UK persons to carry on certain regulated activities in the UK without FCA authorization, provided the activities are carried on from outside the UK. However, this is a UK-side exemption — it does not help UK firms access the EU. For EU market access, UK firms must look at each EU member state's own third-country provisions, which vary significantly.
Which EU member states are most accessible for UK firms post-Brexit?
Ireland and Luxembourg are popular choices due to English-language legal/regulatory environments and established financial services ecosystems. The Netherlands is relevant for wholesale markets. France (particularly Paris) has actively attracted UK-based firms, especially in trading and asset management. Germany (Frankfurt) is a hub for banking. The choice depends on the firm's specific activities, target clients, and existing EU relationships.
How does DORA interact with UK operational resilience rules?
DORA and UK FCA/PRA operational resilience requirements overlap but are not equivalent. DORA is prescriptive and ICT-focused: specific requirements for ICT risk management frameworks, incident classification and reporting, digital resilience testing, and critical third-party ICT provider oversight. UK rules are outcomes-based: firms must identify important business services, set impact tolerances, and invest in resilience. Firms operating in both jurisdictions must satisfy both frameworks, which generally means meeting the more prescriptive DORA requirements covers most UK requirements, but the UK's broader scope (beyond ICT) requires additional attention.
Related Resources
UK Jurisdiction Guide
FCA, PRA, SM&CR, Consumer Duty, and UK national legislation overview.
MiCAR Compliance Guide
Complete CASP authorization requirements, timeline, and capital thresholds.
DORA Compliance Checklist
ICT risk management and operational resilience requirements under DORA.
EU Regulation Map
Visual overview of all EU financial regulations in our knowledge base.
Netherlands (AFM/DNB)
Key destination for UK firms establishing EU operations.
Luxembourg (CSSF)
Europe's largest fund centre — popular for UK fund manager EU entities.
Dual Regulation? One Platform.
Research both EU and UK financial regulation in a single platform. AI-powered answers with article-level citations from 320+ regulatory sources.