Explainer – What is “passporting” and what do I need to know about it?


Where there is a legal requirement, firms must have the proper authorisation to provide financial services in Ireland.

They can get this authorisation from:

  • Central Bank of Ireland
  • A regulatory authority in another country in the European Economic Area (EEA). The EEA is a free trade zone including members of the European Union as well as Iceland, Liechtenstein and Norway.
  • In some cases, a regulatory authority in a “third country” i.e. a non-EEA country.

As a member of the EEA, Ireland is part of a single market. This means that products and services can be traded, without barriers, from one country to another.

The free movement of financial products and services in this way takes place under a system known as “passporting”.

Passporting in/out

There are two forms of passporting – “passporting in” and “passporting out”.

“Passporting in” is where a financial firm uses an authorisation obtained in another EEA Member State (or, in some cases, from a country that is outside the EEA) to sell its products or services to consumers in Ireland

This is effectively importing financial products and services into Ireland.

“Passporting out” is where a financial firm, authorised by the Central Bank of Ireland, sells its products or services to consumers in another EEA country.

This is effectively exporting financial products and services out of Ireland.

How is passporting possible?

Passporting is possible because all firms operating within the EEA must comply with the same rules and regulations when providing financial products and services.

All financial regulators and supervisors are also required to apply the same high standards.

This means that the standard of regulation and supervision of passporting firms is effectively the same across all EEA Member States.

Who supervises firms that are passporting into Ireland?

A firm that passports its services into Ireland is “prudentially regulated” by the regulator or supervisor in its home country. 

Prudential regulation is a type of regulation that obliges firms to manage risk and hold sufficient capital – or cash reserves – for its business needs.

In addition to this regulation, most firms passporting services into Ireland are also regulated by the Central Bank of Ireland for “conduct of business rules”.

However there are exceptions to this and you should contact the firm if you have queries regarding its authorisation and regulatory status.

Where the Central Bank of Ireland regulates firms for conduct of business rules, it is responsible for overseeing how these firms treat customers when providing financial products or services in Ireland.

In summary, all firms must act honestly, fairly and professionally, and in the best interests of their customers. 

Why should I care about passporting?

Although there should be no difference in how firms passporting into Ireland are supervised and regulated, there can be some differences in how these firms operate.

For example, the complaints and compensation process of a firm passporting into Ireland may differ from an Irish-authorised firm.

Always check a firm’s complaints and compensation processes before you buy any financial product or service.  If you are not satisfied with the arrangements, look at alternatives.

How can I check if a firm is passporting into Ireland?

There are two main ways to check if a firm is authorised by the Central Bank or is passporting it services into Ireland.

  • Check the firm’s regulatory disclosure
    All firms must display what’s known as a “regulatory disclosure” on their website, letters, emails, advertisements etc.

If a firm is authorised by the Central Bank it will state:
“[Company name] is regulated by the Central Bank of Ireland”

If a firm is passporting into Ireland, it will state:
“[Company name] is authorised by [name and country of regulator] and is regulated by the Central Bank of Ireland for conduct of business rules.”

What else do I need to know?

If you buy financial products or services from an intermediary (i.e. a broker), for example, motor or home insurance or a mortgage loan, you should check the regulated status of the firm you are buying the product from (i.e. your broker) and also that of the firm that is actually providing the product.

You can do this by checking the name of the insurance company or bank listed on your product documents.

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