The MFSA has issued a circular addressed to all licence holders availing of the principle of passporting on the basis of freedom of services.
The Authority has noted that there are a number of licence holders that had obtained permission to provide services outside of Malta in terms of the AIFMD, MiFID and UCITS Directives, and that are not exercising these passporting rights. These entities have either never actively used such passport or have stopped using the passport altogether for an extended period of time.
The MFSA has warned that such licence holders may not be in line with these Directives depending on the level of cross-border activities undertaken since:
- They are required to inform the MFSA where they are going to provide their services through the use of a passport
- The programme of operations and other information originally presented to the Authority may be outdated
- Any changes to the conditions of the passport on a freedom-of-services basis need to be notified to the MFSA at least one month prior to effecting such changes. Never using or stopping the use of the passport is tantamount to not adhering with such notification of change in conditions.
Licence holders that fail to take prompt actions in line with the above may be deemed to be in contravention of these Directives.
The MFSA is thus requesting all licence holders making use of freedom of services in terms of these Directives to:
- Assess their programme of operations
- Ensure that the contact details provided to the MFSA are up to date
- Ensure that all other information furnished to the MFSA and Host Member State/s is updated; and
- Assess whether it is still the licence holder’s intention to actively passport outside Malta. In the event that licence holders are not making use of an active notification and have not been making use of the passport for a period of more than 3 months, the licence holder is expected to reach out to the MFSA to withdraw such notification.
Licence holders are required to conclude such review by the 26th of May 2021 and any divergences are to be reported to the MFSA by the 7th of June 2021.
Article written by Senior Associate Dr Cherise Abela Grech.
Disclaimer: This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.