On July 25, 2018 the CSSF published a press release 18/25 (the Press Release) addressed to fund managers contemplating to relocate their business to Luxembourg following the United Kingdom's decision to leave the European Union (that decision, the "Brexit" and those fund managers, the "Relocation Seekers"). 

The Press Release concerns both alternative investment fund managers and managers of undertakings for collective investment in transferable securities (UCITS) that consider (i) applying for authorization with the CSSF, (ii) extending their license, or (iii) substantially changing their operational models to cope with Brexit-related aspects (those considerations, the "Applications").

The CSSF has urged the Relocation Seekers to lodge their Applications as soon as possible, as the authorization procedure requires a substantial amount of time and costs to be completed. 

This comes against the background of the UK's scheduled departure from the European Union by March 30, 2019 coupled with a possibility of a hard Brexit taking place.  Under the hard Brexit scenario, no transitional arrangement would be reached between the EU and the UK, which would cause the latter to be considered as a third country in respect of EU legislation.

For Relocation Seekers this would most notably entail losing all existing rights from which they currently benefit under the AIFMD, the UCITS Directive and other related rules, including the right to manage EU funds or market funds in the EU.

The issuance of the Press Release follows an opinion (ESMA34-45-344) and a public statement (ESMA42-110-998) issued by ESMA that cover the same matter and in which ESMA expects the national competent authorities to apply strict standards when assessing the Applications without any derogations or exemptions granted to Relocation Seekers such as fast-track procedures.

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