Malta News

Temporary Permission Regime for UK entities passporting into Malta

Last week, the Malta Financial Services Authority (“MFSA”) published a circular to announce that they are currently preparing legislation so that UK license investment funds, asset managers and investment firms (passporting into Malta) would be able to avail themselves of a regime which the MFSA have rightly named the “Temporary Permission Regime” (TPR).For the above UK entities currently passporting into Malta to be eligible for the TPR, the following conditions must be satisfied:

  • There is a no-deal Brexit;
  • The UK licensed entity must have already obtained a European right to provide services in Malta on a cross-border basis, prior to the no-deal Brexit date; and
  • The UK licensed entity would only be servicing hose contract with clients that were featuring on the UK entities’ respective books until the 20th of September 2019.

This would result in the UK entities not being allowed to offer their services to new clients after such date.

The temporary permission granted under the TPR shall remain valid in Malta until the 31st of march 2020. In the interim, UK entities shall continue with the fulfilment of existing contracts with Maltese clients until the 31st of March 2020, or alternatively, proceed with one of the following:

  • Terminate existing contracts in an orderly manner; and/or
  • Obtain the necessary authorisation until the 31st of March 2020; and/or
  • Proceed with the assignment of the existing contracts to a duly authorised entity.

As of the 1st of April 2020, UK entities passporting into Malta shall be treated as third country firms. UK entities may also be affected by possible legislative changes arising at EU level.

In light of the above, it is being advised that all UK licensed entities passporting into Malta take the necessary steps and implement the necessary procedures to bring their firm in line with what is required should there be a no-deal Brexit.

 

About the Author

The article has been authored by Dr Ursula Farrugia, Advocate at CSB Legal, who specialises in Company Law, Financial Services, Compliance & AML and the Fintech Industry.