BREXIT: Update on the Temporary Permission Regime

The Malta Financial Services Authority (MFSA) has issued a circular to update UK licensed Investment Funds, Asset Managers, and Investment Funds Passporting into Malta concerning a no-deal Brexit scenario. The update is a continuation of the circular issued on 28 March 2019.

The MFSA is drafting legislation which will allow the entities above to avail themselves of the Temporary Permission Regime (TPR) only in case the following conditions are met:

1. A No-Deal Brexit occurs;
2. The UK entity is still in possession of the authorization to provide services in Malta on a cross-border basis prior to the No-Deal Brexit date;
3. Such services can only be provided to clients’ in the entity’s books until 31 March 2020 (no new clients/investors can be acquired after the said date)

The temporary permission shall remain valid in Malta until 31 March 2020. The entities can either continue servicing their clients or:

1. Terminate the existing contract in an orderly matter; and/or
2. Obtain the necessary authorization until 31 March 2020; and/or
3. Transfer their contracts to a duly authorized entity.

As of 1 April, 2020UK entities passporting into Malta shall be treated as third-country firms.

Entities wishing to avail themselves of the Temporary Permission Regime, are requested to fill in and submit the TPR notification form at their earliest and not later than three weeks from the No-Deal Brexit date.