Royal Decree-Law 38/2020, of 29 December 2020, published in the Spanish Official Gazette on 30 December 2020, contains relevant contingency measures for UK financial services entities operating in Spain in light of Brexit.
Firstly, it provides that agreements for the provision of banking, securities, insurance or other financial services by virtue of which an entity authorized or registered by the competent authority of the UK provides services in Spain and that have been entered into before 1 January 2021, will remain in force under the contractually agreed terms.
However, as of 1 January 2021, such UK entities will be considered as third country firms for the provision of banking, securities, insurance or other financial services, and a new authorization must be obtained by such entities in the following events:
a) For the renewal of agreements entered into prior to 1 January 2021.
b) For the introduction of modifications in agreements entered into prior to 1 January 2021, which (i) entails the provision of new services in Spain, or (ii) affects essential obligations of the parties.
c) In those events in which the activities linked to the management of the agreements require authorization.
d) To enter into new agreements.
The activities derived from the management of agreements signed prior to 1 January 2021 and which do not fall on any of the events indicated in letters a) to c) above will not require a new authorization.
Secondly, the authorization or registration granted by the relevant UK authority to the UK entities referred to above will provisionally maintain its validity, until 30 June 2021, to carry out the activities necessary for (i) the orderly termination, or (ii) the assignment of the agreements entered into before 1 January 2021 to entities duly authorized to provide financial services in Spain under the contractually agreed terms.