In 2020 the MSFA issued a circular that explains how Brexit will influence the holders of Maltese licenses that operate in Great Britain through the Internet. The circular provides additional information to the already existing E-Commerce Directive that governs various online commercial activities. Our task today is to examine how the circular will affect people who are planning to get a financial services license in Malta.
Application of the directive while obtaining a license
The application of the E-Commerce Directive affects the services provided without the joint presence of the parties. The Directive aims to establish a legal framework that would support the free provision of e-commerce services in European states, including the sale of services and the following conclusion of the online contracts.
Changes in obtaining a payment service provider license after Brexit
According to Article IV of the E-Commerce Directive, licensed entities are allowed to provide electronic financial services in the EU without obtaining prior authorization in other states of the EU. Yet after Brexit, the Directive will not apply in Great Britain.
It means that from the beginning of 2021 licensed providers are not allowed to offer online services operating under the E-Commerce Directive in Great Britain. Consequently, a whole new list of rules will be necessary to fulfill in order to obtain a payment service provider license in Great Britain.
Moreover, companies who would like to still provide their services in Great Britain after Brexit must apply without delay to the FCA. This step will allow them to get permission for conducting financial services in the local market.
The final word
Businesses who are seeking to provide financial services in Great Britain should take into consideration the changes coming after Brexit and plan their application process for receiving permission thoroughly. Those who are starting now should take into account the new rules for obtaining a license in Great Britain, and those who need to continue providing their services cannot miss the application to the FCA.
Are you about to open a business in Great Britain or Malta? Specialists from COREDO are prepared to provide you professional advice on the regulation of the financial markets in these countries.