CSSF On Mandatory Notifications In A No-Deal Brexit Context

Following the publication of Luxembourg laws of 8 April 20191 (see our previous briefing here), the Luxembourg Financial Sector Supervisory Authority (CSSF) has issued two press releases aimed at undertakings for collective investment (UCIs) and/or their managers, and certain firms currently authorised in the United Kingdom (UK) which intend to continue their activities in Luxembourg following a withdrawal of the UK from the European Union (EU) without the conclusion of a withdrawal agreement (no-deal Brexit). UCIs and/or their managers established in the UK that are currently authorised entities under the UCITS Directive2 and/or the AIFM3 Directive respectively, as well as firms currently authorised in the UK under the provisions of MiFID II, CRD, PSD 2 or EMD4 will, from the date the UK leaves the EU, be considered as "third-country firms/entities". This means they shall no longer benefit from the relevant passporting regime and, as a result, will not be able provide their services in Luxembourg without authorisation by the CSSF.

UK firms (currently authorised under CRD, MiFID II, PSD 2 or EMD)

In the context of business continuation of such UK firms, the CSSF has highlighted a distinction between the conclusion of new contracts and the continuation of existing activities.

UK firms that intend to continue their business and conclude new contracts in Luxembourg are required to be duly authorised by the CSSF and should submit an application for authorisation as soon as possible, keeping in mind that the authorisation process can take up to 12 months; UK firms and existing activities: the CSSF has announced a transitional period of 12 months following the withdrawal date during which UK firms providing financial services may continue their activities. This period will apply only to "contracts that have entered into force before Brexit (existing contracts) and contracts concluded after Brexit with close links to existing contracts (closely-related contracts)". In order to benefit from the transitional regime, firms must notify the CSSF no later than 15 September 2019 of their intention to continue their business activities through the notification portal (to be introduced on the CSSF website shortly). The CSSF intends to assess each notification on a case by case basis - to that extent, firms will have to provide inter alia sufficiently detailed information on pre-no-deal Brexit passporting of services to Luxembourg. The CSSF will...