Brexit: Important Clarifications Published By The CSSF

The CSSF has published on 15 July 2019 two press releases concerning mandatory notifications for UK firms as well as for UCIs and their managers in the context of Brexit.

1. Mandatory CSSF notification for UK firms in the context of Brexit

   On 15 July 2019, the CSSF issued a press release 19/33 regarding mandatory notification requirements applying to UK firms in the context of the withdrawal of the United Kingdom from the European Union.

   The CSSF reminds that firms that are currently authorised under the CRD, MiFID II, PSD 2 or EMD in the UK ("UK firms") will be considered as "third-country firms" and will lose the benefit from their existing passporting rights under the relevant EU Directives from the date the UK leaves the EU without concluding a withdrawal agreement ("hard Brexit"). The CSSF thus addresses this reminder to credit institutions / banks operating under EU Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV), investment firms operating under EU Directive 2014/65/EU on markets in financial instruments (MiFID II), payment institutions operating under EU Directive 2015/2366/EU on payment services in the internal market (PSD 2) and electronic money institutions operating under EU Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions (EMD).

   The CSSF stresses that the provision of regulated services in Luxembourg without a proper authorisation is illegal and thus subject to sanctions and that UK firms should by now have taken the necessary steps to prepare and anticipate the consequences of a possible hard Brexit. The CSSF then makes(1) a general statement on authorisation requirements and (2) provides additional details on the steps to be followed to benefit from the transitional regime introduced by a law of 8 April 2019 relating to the measures to be taken in relation with the financial sector in case of a withdrawal of the United Kingdom from the European Union (the "Brexit Law"), which amends amongst others the law of 5 April 1993 on the financial sector (the "LFS").

   1.1. Authorisation requirements

   The CSSF mentions that UK firms that intend to continue their business and conclude new contracts in Luxembourg following a hard Brexit are required to submit an application for an authorisation to the CSSF as soon as possible. The CSSF further mentions that UK firms should be mindful that the granting of an authorisation can take up to 12 months following the...