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CSSF sets new Brexit deadline for UK entities

CSSF sets new Brexit deadline for UK entities
  • United Kingdom
  • Financial services and markets regulation
  • Investment funds and asset management

26-11-2019

Introduction

Earlier this year, Luxembourg’s financial services regulator, the Commission de Surveillance du Secteur Financier (the “CSSF”) announced a year-long transitional period, to take effect from the date of a no-deal Brexit. During this period, UK financial firms will be able to continue their current activities in Luxembourg for twelve months from the date of Brexit (under the EU passport for financial services). Once this transitional period has elapsed, UK firms will have to be duly authorised in Luxembourg if they wish to continue operating in the territory.

UK firms that are planning to continue to serve existing contracts in Luxembourg under the transitional regime, need to notify the CSSF using the dedicated notification forms provided on the CSSF website. The deadline for submission had passed, but the regulator has recently extended the deadline in light of political developments, offering a lifeline to firms which missed the initial notification window.

Who is affected?

Firms authorised under CRDIV, MiFID II, PSD 2 or EMD in the UK, as well as funds and their managers who currently provide financial services in Luxembourg on the basis of existing passporting rights under the relevant EU Directives.

When?

The original deadlines given by the CSSF in advance of Britain’s anticipated 31 October departure were:

15 September 2019 To benefit from the 12 month transitional period, ensuring the continuity of contracts that were entered into before the date of Brexit, as well as any contracts entered into after that date which have a close link with existing contracts. 

31 October 2019 – Entities wishing to provide services in Luxembourg after the end of the transitional period must apply for an authorisation to continue providing services beyond the end of the 12 month transitional period. 

The new deadline

Following the decision of the European Council of 30 October 2019 to offer the UK another extension, the reference date for a no-deal Brexit in all of CSSF’s previously published communications should now be read as 31 January 2020.

With respect to the mandatory notification for UK firms, funds and/or their managers wishing to continue to provide services in Luxembourg after a no-deal Brexit, the CSSF encourages UK entities that have not yet done so to apply for the transitional regime by submitting a Brexit notification via the dedicated eDesk portal at their earliest convenience.

Once the transitional regime application is made the subsequent application for authorisation, notification, or further information on alternative actions taken must be submitted by funds and/or their managers to the CSSF no later than by 15 January 2020.

Notifications should include details of the firm, fund or managers post-Brexit plans, both for the 12-months’ transitional period and after.

Missed deadline?

If a notification has not submitted by the above date, the firm in question will not be entitled to benefit from the transitional period and will have to cease all business in Luxembourg from the date of a no-deal Brexit.

As the CSSF stresses in its press release 19/54, regardless of current political developments, impacted entities should continue to take all necessary steps to anticipate and prepare for the consequences of a possible no-deal Brexit. Funds and managers should continue to improve and progress their contingency plans, taking particular care to ensure that customers and investors remain adequately informed.

How Eversheds Sutherland can help 

If you require any assistance in submitting an authorisation application or notification, the investment funds team at Eversheds Sutherland Luxembourg would be happy to assist.