Hi @m, for us to offer access to the stock markets to retail customers/investors we require a license in each jurisdiction we intend to market our trading app in. With Europe, rather than obtaining a license in each county we expand into we can use the passporting rights of our license in one European jurisdiction to enter other EU countries.
Passporting is a little like going through border control when you travel. Much like the stamp you gain passing through border control, passporting a license works in a similar way.
Passporting requires us to notify the local regulators that we intend to use our passporting rights and enter their jurisdiction. This process typically takes 30 days and the local regulator has the authority to approve or deny your entrance into their country.
In order to be approved, you need to ensure you comply with local regulations. As an example, under Section 3 on Market Transparency and Integrity, Article 31 of the MIFID II regulations, we’re required to provide statements, such as an EOFY statement to our users. In some country across Europe the tax calendar year is different, so we need to ensure we adapt the app so we’re sending our users an EOFY statement in compliance with MIFID II but also in compliance with local regulations ie. the local tax calendar year.
Hope this gives more clarity to how passporting works.