Access to Financial Services Markets Market access arrangements for financial services between the UK and Gibraltar
Gibraltar is a British Overseas Territory which has its own institutions of self-government. Gibraltar enjoys legislative autonomy under its own constitution, brought into effect by the Gibraltar Constitution Order 2006. Gibraltar’s Parliament has the power to pass internal legislation, including on financial services, while the UK remains responsible for Gibraltar’s external relations and defence.
	The financial services industry plays an important role in Gibraltar’s economy and Gibraltar-based firms have made extensive use of the existing market access arrangements between the UK and Gibraltar. Currently firms based in Gibraltar service a large retail consumer base in the UK, particularly in the insurance sector, where more than 20% of motor policies in the UK are written by Gibraltar-based insurers.
	As the common EU membership of the UK and Gibraltar has ended, the Government is committed to creating a new legal and institutional framework that provides for mutual market access and aligned standards in financial services between both jurisdictions. The UK and Gibraltar have a historic and unique relationship in financial services, and the UK does not have the same level of market access arrangements with any other jurisdiction. During the Transition Period, the UK and Gibraltar continued to enjoy reciprocal access to each other’s markets through a passporting regime similar to that available to EU firms. The Government introduced the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/589) and the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/680) to prevent Gibraltar-based firms accessing the UK market from suddenly losing their access rights at the end of the Transition Period. These arrangements are however temporary and do not provide an effective long-term legislative regime for market access.
	The Act enables the establishment a new permanent market access regime, the Gibraltar Authorisation Regime (GAR). This new framework will ensure that Gibraltarian financial services firms can access the UK’s wholesale and retail markets on the basis of alignment of relevant law and practice, and close cooperation between the UK and Gibraltarian governments and regulators. The Act also makes provisions to facilitate the access of UK-based firms to the Gibraltarian market.