With a no-deal Brexit scenario looming, the Malta Financial Services Authority ('MFSA') has issued a circular which provides a well-needed update to investment funds, investment firms and asset managers licenced in the UK (collectively referred to as "UK entities") passporting into Malta.
The intention of the MFSA is to grant temporary permission to UK entities that already passport their services and activities into Malta. Therefore, only existing clients/contracts would be able to benefit from the Temporary Permission Regime (the "TPR"), and such regime will only apply if the UK leaves the European Union without a deal by the relevant date. Furthermore, any TPR granted by the MFSA would remain valid for a period of 12 months after the relevant date.
This envisaged regime would thus apply to UK entities wishing to obtain the necessary authorisation, and/or terminate existing contracts in an orderly manner, and/or proceed with the assignment of the contracts to a duly authorised entity. However, it is pertinent to note that, post-Brexit, UK entities passporting into Malta would not be allowed to offer their services to new investors or clients in Malta.
Therefore, any entity providing cross-border services from the UK to Malta under the current passporting arrangements that wishes to avail itself of the TPR is urged to analyse its position and subsequently notify the MFSA of its future intentions, such as whether it intends to apply for a Maltese licence or otherwise.
The circular can be accessed by clicking on this link: https://www.mfsa.com.mt/wp-content/uploads/2019/03/20190328_Circular_BrexitMaltaTPRFinalVersion.pdf