Mandatory CSSF notification for UK firms in the context of Brexit

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Mandatory CSSF notification for UK firms in the context of Brexit

18 July 2019

Regulatory News Alert

On 15 July 2019, the Commission de Surveillance du Secteur Financier (CSSF) issued two press releases (19/33 and 19/34) with regard to mandatory notification in the event of the UK leaving the EU without a withdrawal agreement (“hard Brexit”). The former is addressed to UCIs and/or their managers, and the latter to UK firms authorized under CRD, MiFID II, PSD 2 or EMD (UK firms).

Mandatory notification for UCIs and/or their managers

With press release 19/33, the CSSF reminds that UCIs and/or their managers established in the UK authorized under the UCITS Directive and/or the AIFM Directive will be considered as “third-country entities” and will lose the benefit of passporting rights under the relevant EU Directives as from the 31 October 2019.

Hence, in order to continue to pursue their activities in Luxembourg, all impacted entities will have to follow a two-step approach:

  • Notifying the CSSF of their intention to keep providing services in Luxembourg after the occurrence of “hard Brexit”, via a dedicated (soon to be available) portal, no later than 15 September 2019
  • Submitting to the CSSF the application for UCITS and/or AIFM authorization, or, as the case may be, the corresponding notification or information on any action taken otherwise, no later than 31 October 2019

As outlined by the Law n. 238 of 11 April 2019 (Brexit Law) a 12-month transitional regime may be granted to UCIs and/or their managers to ensure the continuity of existing contracts and the protection of UCI investors, exclusively under the condition that the notification and subsequent application have been submitted within the established timeframe.
 

Mandatory notification for UK firms

With press release 19/34, the CSSF highlights that UK firms must have the authorization for the provision of regulated services in Luxembourg after a “hard Brexit”.

Accordingly, in order to keep serving clients in Luxembourg, UK firms must:

  • With regard to new contracts, submit an application for an authorization to the CSSF as soon as possible
  • With regard to existing contracts (and contracts concluded after Brexit with “close links” to existing contracts), benefit from a 12-month transitional regime to keep carrying out their activities, with the prerequisite to notify the CSSF of this intention no later than 15 September 2019.
     

How can Deloitte help?

Deloitte has developed a systematic approach: a Brexit health check to assess potential impacts Brexit may have on your structure and organization. From there, based on both business development plans and legal realities, Deloitte can help you implement operational changes for your robust post-Brexit environment strategy.

With Deloitte RegWatch, stay on top of regulatory news and prepare your organization to address future regulatory developments.

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