Passporting

Passporting is the mechanism that lets a financial firm authorised in one European Economic Area country offer its services across all other EEA states without obtaining a separate licence in each. Under MiFID II, a broker licensed by one national regulator notifies its home authority, which passports the permission to host-country regulators — the reason so many EU-facing forex brokers operate from a single hub such as Cyprus while serving clients across the bloc. Supervision stays primarily with the home-state regulator, while conduct rules of the host state can still apply. The United Kingdom lost passporting rights after Brexit, which forced UK brokers to establish separately licensed EU entities and vice versa. When checking a broker's authorisation, registers distinguish between locally licensed firms and those operating inbound on a passport.