MFSA Issues Brexit Guidance to Investment Firms

MFSA Issues Brexit Guidance to Investment Firms

On the 11th January 2019, the Malta Financial Services Authority (MFSA) issued a Circular to Malta-licensed fund managers and investment firms currently passporting into the UK in connection with the implications of Brexit on their ongoing operations.

The TPR would remain in force until Malta-licensed fund managers and investment firms can seek full authorisation from the FCA, thereby effectively ensuring that licensees’ regulated activities within the UK are not interrupted in the event that the passporting regime ceases to apply post-Brexit

The said Circular confirms that fund managers and investment firms licensed in Malta and currently passporting into the UK will need to apply to the UK Financial Conduct Authority (FCA) under the Temporary Permissions Regime (TPR) in order to facilitate the continued validity of their regulated business within the scope of their current permissions in the UK. The temporary permission is intended for a limited period of time which would apply from the date on which the UK leaves the EU and would remain in force until Malta-licensed fund managers and investment firms can seek full authorisation from the FCA, thereby effectively ensuring that licensees’ regulated activities within the UK are not interrupted in the event that the passporting regime ceases to apply post-Brexit.

This measure is an important one in view of the prevailing uncertainty insofar as applicability of an implementation or transition period is concerned. In the absence of such transition period (which would only be possible if a ‘withdrawal agreement’ is formalised), the UK will effectively become a ‘third-country’ in relation to the EU passporting regime as soon as it leaves the EU, which in turn means that EU investment firms and fund managers will no longer be able to passport into the UK as is currently the case.

The MFSA urged fund managers to take prompt action and warned that failure to submit the required notification for any given fund will result in the fund manager being unable to use the temporary permissions marketing regime for that fund

Malta-licensed fund managers and investment firms currently passporting into the UK and intending to continue offering their services in the UK are therefore required to apply for the TPR via the FCA’s ‘Connect system’ (https://www.fca.org.uk/firms/connect) without delay. As part of the said notification procedure, fund managers will also need to notify FCA of the passported funds which they wish to continue to market in the UK.

The MFSA urged fund managers to take prompt action on this matter and warned that failure to submit the required notification for any given fund will result in the fund manager being unable to use the temporary permissions marketing regime for that fund.

The FCA notification window expires on the 28th March 2019 and the procedure is free of charge.

Contact Be. Legal Advocates for more information on how the FCA Temporary Permissions Regime affects your licensed business interests in the UK

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