Can I have clients from outside the UK?

Yes you can by using the concept of "reverse solicitation". This concept refers to a situation where a client from outside the UK actively approaches a UK FCA-regulated firm to request services, rather than the firm itself marketing its services to that client. This concept is crucial for UK firms wishing to operate in jurisdictions where they are not directly authorised, as it can affect how they engage with potential clients outside the UK.

Reverse solicitation is not straight forward and some of the important considerations are:

1. Regulatory Framework: Reverse solicitation is generally recognised under both UK and EU financial regulations, but its application can vary significantly between different countries. UK firms must be aware of and comply with the local rules in each country where their clients are based.

2. MiFID II and Brexit: Under the Markets in Financial Instruments Directive (MiFID II), which was applicable in the UK before Brexit, provisions existed that allowed for reverse solicitation as an exemption to certain cross-border service restrictions. Post-Brexit, UK firms must check how reverse solicitation is treated both under UK law and in the jurisdiction of the client.

3. Documentation and Evidence: Firms must carefully document instances of reverse solicitation to prove that it was the client who initiated the contact and service request. This is important for ensuring compliance with both UK and international regulations.

4. Risks of Misinterpretation: Firms should be cautious as some jurisdictions might have a narrow interpretation of what constitutes reverse solicitation. There is also a risk of regulatory penalties if a firm is deemed to be soliciting clients actively under the guise of reverse solicitation.

5. Practical Measures: It is advisable for firms to implement internal policies and training to ensure that all employees understand the limits of engaging with potential clients outside the UK. This includes clear procedures on how to handle unsolicited enquiries from overseas clients.

6. Consultation with Legal Advisors: Given the complexities and variations in how reverse solicitation is treated internationally, UK firms should consult with legal advisors who specialise in international financial regulations. This will help ensure that their cross-border activities comply with applicable laws.

Firms need to navigate carefully the rules on reverse solicitation to avoid unintentional breaches of cross-border regulations. The approach will vary depending on the specific circumstances and the jurisdictions involved, underscoring the importance of tailored legal advice and robust internal compliance measures.