On 26th April 2021, the Malta Financial Services Authority (MFSA) issued a circular titled "Circular for Licence Holders availing of Freedom of Services" which is aimed at addressing licensees in possession of a license under AIFMD, MiFID and the UCITS Directive which provide services outside Malta through the exercise of the freedom of services rights contained in the aforementioned pieces of EU legislation.

The MFSA has noted that a number of licensees who have submitted a notification to it in order to exercise such rights have either failed to ever commence the provision of services outside of Malta as noted in the respective notification or have ceased the provision of services outside of Malta. In this respect, the MFSA has noted that such licensees are potentially in breach of provisions contained within the aforementioned pieces of legislation since, by way of example, a programme of operations initially submitted with the notification may be outdated since any changes made to the original operational aspects indicated in the passporting notification may not have been notified to the MFSA at least one month prior to such changes taking effect as is required by law. In the case of the latter, the MFSA has noted that entities which have (a) never availed of or (b) have ceased to continue to avail of the right to provide services outside of Malta may have constituted a breach of such an obligation.

The MFSA has encouraged licensees which are availing of such a right to:

  1. Assess their programme of operations and ensure that it is time relevant;
  2. Ensure that the contact details which the MFSA has vis-à-vis with such licensees are up to date;
  3. Ensure that all other information furnished to the MFSA and to the competent authority in the host member state are up to date and hence, time relevant; and
  4. Assess whether the licensee is still intent on actively providing services outside of Malta. If this is the case and the licensee has not been availing of such a right for more than 3 months, then the licensee is expected to withdraw the notification initially submitted to the MFSA.

The MFSA has obliged subject licensees to perform the relevant assessments by 26th May 2021 and to report any divergences to the MFSA by 7th June 2021.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.