CSSF Mandatory notifications for authorised UK Firms, UCIs and their managers in the context of Brexit

Posted in Financial services Financial institutions

On 15 July 2019, the Luxembourg financial regulator, the Commission de Surveillance du Secteur Financier (the CSSF) issued two press releases (19/33 and 19/34) in relation to Brexit requiring certain measures to be taken by authorised UK firms and UK Undertakings for Collective Investment (UCIs) and theirs managers currently providing their services in Luxembourg under the relevant passporting regime.

The CSSF noted that, in the event of a no deal Brexit, affected UK entities will lose the benefit of their passporting rights to access the Luxembourg market and will be considered as third country entities.

UK firms authorised under CRD, MiFID II, PSD 2 or EMD

UK firms authorised under CRD[1], MIFID II[2], PSD 2[3] or EMD[4] intending to continue providing their services in Luxembourg after a hard Brexit and conclude new contracts are required to submit an application for authorisation by the CSSF as soon as possible, bearing in mind that the granting of an application can take up to 12 months.

With respect to existing activities, the CSSF can allow authorised UK firms to continue their activities for a limited transitional period of 12 months after a no deal Brexit. This transitional regime is limited in time and scope as it applies only to the scenario of a no deal Brexit and only to contracts that have entered into force before Brexit as well as to contracts concluded after Brexit with close links to existing contracts.

UK firms intending to continue providing their services in Luxembourg with respect to existing activities under the transitional regime are required to notify the CSSF no later than 15th September 2019.

A dedicated notification portal will be opened on the CSSF website in the coming weeks.

UK UCIs and their managers

UK UCIs and/or their managers (UCITS management companies and/or AIFMs) intending to continue providing their services in Luxembourg after a hard Brexit are required to notify the CSSF no later than 15th September 2019. A dedicated notification portal will be opened on the CSSF website in the coming weeks.

In addition, such UCIs and their managers are required to submit a corresponding application for authorisation, and/or the corresponding notification or information on any action taken otherwise to address the loss of passporting rights by no later than 31 October 2019.

The CSSF may, on a case-by-case basis, grant impacted UCIs, and/or their managers, the right to continue their activities for a limited transitional period of 12 months after a no deal Brexit, such decision to grant the benefit of the transitional regime being notified within 10 business days of the submission of the required information to the CSSF.

UK managers currently authorised in the UK under both the UCITS directive and the AIFM directive will be required to proceed with two separate Brexit notifications to the CSSF.

[1] Capital Requirements Directive

[2] Markets in Financial Instruments Directive

[3] Payment Services Directive

[4] E-Money Directive

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