On the 15th July the CSSF (Financial Sector Supervisory Commission) published two press releases detailing the impact that a hard Brexit could have on UK Financial Firms, along with any UCIs they may manage (collectively ‘UK Firms’).
The press releases outline the steps that UK firms should take to ensure that they can continue to do business in Luxembourg following a possible hard Brexit.
The CSSF reiterated to UK Firms that they will be considered as “third-country entities” and will lose their passporting rights under the relevant EU Directives, should a hard Brexit occur.
The CSSF have also stressed that UK firms should already have taken any necessary steps to anticipate and prepare for the consequences of a possible hard Brexit and they have reminded UK firms that the provision of regulated services in Luxembourg without the proper authorisation is illegal and therefore subject to sanctions. All impacted UK Firms will be required to notify the CSSF of their intention to continue operating in Luxembourg no later than the 15th September, should a hard Brexit occur. The CSSF have opened a dedicated, notification portal on their website to allow notification submissions – https://edesk.apps.cssf.lu/edesk-dashboard/dashboard
Following this notification, UK Firms will be required to submit a plan to the CSSF setting out how they intend to continue doing business in Luxembourg, factoring in their loss of passporting rights, following a hard Brexit.
While the Brexit Laws previously published by the CSSF earlier this year allow for a transitional regime for UK firms, this regime will be limited in its scope and only for a period of 12 months. Approval to utilise this transitional regime will be granted by the CSSF on a case-by-case basis and only after the adequate Brexit notification submissions have been made within the allocated timeframe.
Entities that are currently authorised in the United Kingdom under both the UCITS Directive and the AIFM Directive will be required to submit a Brexit notification for both licenses.
A link to both publications is set out below:
Should you wish to discuss how the above may affect your firm, please reach out to the following DMS contacts:
Darren Gorman
Oisin Kilgallen
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