Electronic Commerce Directive: operation after the transition period

Find out what’s changed for UK and EEA firms now that the transition period has ended.

The Treasury has given UK financial regulators the power to make transitional provisions to financial services legislation for a temporary period. This is known as the Temporary Transitional Power (TTP).
We are applying the TTP on a broad basis. However, there are some areas where we are not applying the TTP, including to Electronic Commerce for EEA firms. Firms are therefore now expected to comply with key requirements.

 

The Electronic Commerce Directive (ECD) is a piece of EU legislation that provided an exclusion from host state regulation for on-line activities provided from one EEA state to a person in another EEA state.

In the UK, the relevant provisions that transposed this exclusion were:

These provisions are no longer applicable as the exclusion fell away at the end of the transition period on 31 December 2020.

What this means for UK firms

The ability for UK firms to continue to service EEA customers using the ECD exclusion has ended.

If you were relying on the exclusion to do business in the EEA before the end of the transition period, you should have made alternative arrangements to continue, in consultation with the relevant EEA regulator.

If you have not finalised your arrangements for continuing to do business into the EEA, you must speak to the relevant regulators where clients are based, and comply with the relevant national law in those jurisdictions.

In all circumstances, firms should continue to provide timely and fair, clear and not-misleading information to their customers.

See a list of EEA regulators

What this means for EEA firms

Now that the ECD exclusion has fallen away, EEA-based firms can no longer use to it to exempt themselves from UK regulation, or from the UK Financial Promotion restrictions, or both, when providing online-only services into the UK market. EEA-based firms affected by this change should have addressed any impacts to their business models, their marketing or both before the end of the transition period. 

If your firm wishes to provide new regulated financial services business on-line into the UK, you need to consider whether you require UK authorisation. For more information, see our pages on authorisation.

Firms wishing only to wind down their existing regulated financial services business that fell within the exclusion, that was entered into before the end of the transition period, are able to do so under the provisions in Part 4 of the Electronic Commerce and Solvency 2 (Amendment etc) (EU Exit) Regulations 2019.

If your firm is using these provisions to wind down existing regulated financial services business in the UK you should notify us in line with our direction by completing a notification form and emailing it to [email protected] as soon as reasonably practicable.

There will be no fee for firms making such a notification. We will display the names of notifying firms on this page.

Contact us

If you have any questions, please contact us.

Page updates

01/10/2020: Information added Update in highlight box on key requirements for firms