Mizuho Securities obtains license from Germany’s BaFin

Maria Nikolova

The aim is to secure smooth continuation of trading activities with clients in case of a hard Brexit.

Business preparations for all possible outcomes of Brexit continue, with the latest example provided by Mizuho Securities Co., Ltd., a subsidiary of Mizuho Financial Group, Inc. (TYO:8411). Today, the company announces that Mizuho Securities Europe GmbH, established in Frankfurt as a subsidiary of Mizuho International plc – the UK business of Mizuho Securities, was granted a MiFID investment services license by Germany’s financial regulator BaFin.

The aim is to secure smooth and uninterrupted continuation of trading activities with clients in case of a hard Brexit.

In July 2017, Mizuho Securities said it had started procedures for applying for a license to establish a new company to engage in securities business in Frankfurt, Germany. The decision was made in the process of assessing the impact of Brexit, and against the background of continuing the effort to develop Mizuho’s network for servicing customers in Europe and around the world in a sustainable and reliable manner.

Other online trading companies have also opted to secure BaFin licenses in order to prepare themselves for all possible consequences of Brexit. Electronic trading major IG Group Holdings plc (LON:IGG), for instance, has recently confirmed that IG Europe, the Group’s client facing subsidiary in Germany, has received its licence from BaFin. This offers certainty that IG will be able to offer its regulated financial products in all EU member states following the UK’s exit from the EU.

In the meantime, the UK Financial Conduct Authority (FCA) has published a consultation paper on plans to introduce a temporary permissions regime (TPR). The temporary permissions regime will allow EEA firms and funds to continue regulated business in the UK, if the UK leaves the EU in March 2019 without an implementation period in place.

Put briefly, firms should register between January and March 2019 for the temporary permissions regime, and it will apply for a maximum of three years. Firms will be given with ‘landing slots’ within which they’ll need to submit their authorisation application. While in the scheme, the FCA proposes to operate a system of substituted compliance for certain new rules which impose obligations, so that in most cases firms will not need to start complying with the full UK implementation of a given rule until the point at which they become UK authorised.

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