MFSA Issues Circular on Brexit Readiness
On the 18th of November 2020, the Malta Financial Services Authority (‘MFSA’) issued a circular outlining its expectations following the end of the Brexit transition period on the 31st December 2020. The latter allowed entities and firms to continue building their preparatory work and facilitate an orderly withdrawal from the European Union.
In view that UK firms will no longer be able to offer financial services to EU customers through the pan-European passport, the MFSA has outlined the steps that such firms are expected to take to continue providing their services in Malta. Investment firms have, as per the MFSA’s circular issued in July 2019, been requested to proceed with terminating existing contracts with Maltese clients, obtain the necessary authorisation in Malta or assign the business to a duly authorised entity. On the other hand, UCITS and AIFs marketed in Malta shall be allowed to continue to do so by submitting the relevant application under the Maltese National Private Placement Regime, as from the 18th November 2020.
With regard to insurance undertakings and intermediaries, the MFSA has explained that such entities have been required to seek necessary authorisation, or to carry out an orderly run-off of the business which became unauthorised. Entities proceeding with the latter option should inform the MFSA accordingly. Insurance intermediaries and distributors which do not obtain authorisation from the MFSA before the UK’s withdrawal from the EU are also required to inform the MFSA of a realistic contingency plan. Notifications in terms hereof are required to be made without delay.
Whilst Maltese licence holders wishing to continue providing financial services in the UK should do so in line with the guidance provided by the relevant UK financial services regulator, the MFSA has directed any Maltese entities which intend to make use of their passporting rights to the UK, to submit an outbound passporting notification request to the MFSA by not later than the 10th December 2020.
DF has assisted several licence holders required to take action due to Brexit, such as notifications under the TPR, authorisations under the respective regime or the setting up of contingency plans. Should you require further information or assistance, please do not hesitate to contact our financial services team at firstname.lastname@example.org .