Macquarie Group Brexit Planning - Frequently Asked Questions
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Macquarie Group
Brexit Planning - Frequently Asked Questions
September 2020
1. How is Macquarie planning for Brexit? Please note that this communication supersedes the
corresponding ‘Brexit Planning: Frequently Asked Questions’
For the provision of regulated financial services (excluding communications published in February, September and
physical trading activities) throughout the European November 2019 and January 2020.
Economic Area (“EEA”), Macquarie – which for this
purpose means the divisions of which are referenced in this 2. What are the details of MBE?
communication, in particular the Commodities and Global
Markets (“CGM”) and Macquarie Capital divisions – currently MBE is a company registered and headquartered in Ireland.
operates using the EU’s cross-border ‘passporting’ rights MBE will operate from its headquarters in Dublin, and
under the Markets in Financial Instruments Directive through branches in France and Germany.
(“MiFID”) and Capital Requirements Directive IV ("CRD IV")
MBE is a direct, wholly-owned subsidiary of Macquarie Bank
(as applicable).
Limited (“MBL”) and an indirect, wholly-owned subsidiary of
As a consequence of the UK’s intended withdrawal from Macquarie Group Limited (“MGL”), a company incorporated
the EU (“Brexit”), the relevant Macquarie Group entities in Australia and the ultimate parent entity whose shares are
are likely to lose the benefit of their respective MiFID listed on the Australian Securities Exchange (ASX) under the
‘passporting’ rights, which will impact their ability to continue stock code ‘MQG’.
to offer financial products and services to clients located in
MBE was incorporated in Ireland as a designated
EEA jurisdictions.
activity company on 28 September 2018, with
Macquarie is therefore implementing a revision to its legal registered number 634817. Its Legal Entity Identifier (LEI)
entity and operating strategy that is designed to maintain is 549300E5ENQVY2IBLF67.
continuity of service to its EEA clients and counterparties and
continue to provide EEA financial products and services to its 3. What are the details of MCI?
global client base.
MCI is a company registered and headquartered in Ireland.
As noted in the answer to question 5 (below), we have MCI will operate from its headquarters in Dublin, with
obtained from the Central Bank of Ireland (“CBI”) licences branches in France, Germany, Spain and the Netherlands.
authorising two new entities which benefit from MiFID
‘passporting’ rights. Those entities are: MCI is a direct, wholly-owned subsidiary of Macquarie
Corporate Holdings Pty Limited and an indirect, wholly-
• Macquarie Bank Europe Designated Activity Company owned subsidiary of MGL.
(“MBE”), which is authorised to act as a credit institution;
and MCI was incorporated in Ireland as a designated activity
company on 27 September 2018, with registered number
• Macquarie Capital (Ireland) Designated Activity Company 634747. Its LEI is 549300SD59QHOIVT4626.
(“MCI”), which is authorised to undertake broker-dealer
services and investment firm services.Macquarie Group | Brexit Planning | Frequently Asked Questions
4. How will MBE and MCI fit into the MBE will carry out its business under a licence issued
overall Macquarie Group structure? by the European Central Bank (“ECB”), which is granted
further to a recommendation from the CBI under section
MBE and MCI feature in the overall Macquarie Group 9 the Central Bank Act 1971 of Ireland.
structure as follows:
In addition to regulation by the CBI, MBE will be subject
to ‘indirect’ supervision by the ECB as determined
through the authorisation process under the Single
Macquarie Group Limited
Supervisory Mechanism Regulation (Regulation (EU)
(listed on ASX)
1024/2013) (as implemented in Ireland).
Established in Australia
• MCI
100% 100% MCI is regulated by the CBI as a MiFID investment firm.
Business conducted from branches will be supervised by
the appropriate host state regulator.
Macquarie Financial Macquarie 6. What are the addresses of MBE and MCI?
Holdings Pty Limited B.H. Pty Limited
The registered and correspondence address for both MCI
Established in Australia Established in Australia
and MBE is First Floor, Connaught House, 1 Burlington Road,
Dublin 4, D04 C5Y6, Ireland.
100% 100% ordinary shares 7. How can I obtain further details on company
information / KYC?
For onboarding purposes, MBE’s and MCI’s certificates of
Macquarie Corporate Macquarie Bank Limited incorporation are available for download at the Companies
Holdings Pty Limited Established in Australia Registration Office in Ireland.
Tax information in respect of MBE and MCI, including Irish
Certificates of Tax Residence and United States W-8BEN-E
100% 100% tax forms, can be obtained as described in the answer to
question 29.
Macquarie Capital Macquarie Bank Europe Onboarding information packs for MBE and MCI are
(Ireland) Designated Designated Activity available to clients.
Activity Company Company
If you are a client of CGM and require a copy of the
Established in Ireland Established in Ireland
onboarding information pack, please contact cgmbrexit@
macquarie.com.
If you are a client of Macquarie Capital, any requests should
5. How are MBE and MCI regulated and supervised?
be directed to maccap.brexit@macquarie.com.
MCI and MBE received their licences from the CBI in
8. How can I obtain information on MBE’s and MCI’s
February 2019 and October 2019 respectively.
branch offices?
• MBE
Information on branch office addresses and registration
MBE is regulated by the CBI as a credit institution numbers are available on Macquarie Group’s regulatory
under the Capital Requirements Directive (Directive disclosures page.
2013/36/EU), the Capital Requirements Regulations
9. Will MBE or MCI have a public credit rating?
(Regulation (EU) 575/2013/EU) and the Single Supervisory
Mechanism Regulation (Regulation (EU) 1024/2013) (as MBE has been given the same credit ratings as its parent,
implemented in Ireland). MBL, by Standard & Poor’s, i.e. A+ / A-1.
It is not expected that MCI will have an external credit rating.Macquarie Group | Brexit Planning | Frequently Asked Questions
10. To what extent are MBE and MCI capitalised? • regardless of the recommended approach, we will
endeavour to replicate, as much as possible, your
The capital injected into MBE as at 28 August 2020 was current documentation with us, keeping amendments to
EUR 450 million. the minimum required in order to make the relationship
transition as smooth and straightforward as possible; and
The capital injected into MCI at 27 February 2019 was EUR
60 million. • it may also be necessary for us to request certain actions
by you (for example, to provide updated or additional
11. When will accounts of MBE and MCI be available?
onboarding information, including information required
MCI prepared audited financial statements for the period due to the branch locations in Germany and France, or to
ended 31 March 2019, and is currently preparing audited execute and return a client monies consent letter).
financial statements for the year ending 31 March 2020.
We are grateful for your continued cooperation with our
MBE prepared audited financial statements for the period repapering and onboarding teams on this matter, which
ended 31 March 2020. is intended to ensure that our current relationship will be
subject to minimal disruption as a result of Brexit.
12. As a client of CGM, what does this mean for my
existing agreements, relationship and how Macquarie 13. I am a CGM client of MBIL based in EEA, what
interacts with me? happens if I don’t move my business to MBE?
CGM1 currently provides EEA clients with banking and After 31 December 2020 it is expected that there will be
investment firm services primarily through Macquarie Bank significant restrictions on the services that MBIL can offer
International Limited (“MBIL”) (or, in some cases, MBL to most clients that are based in the EEA. As such, your
London Branch (“MBL LB”) which is the UK branch of an normal relationship contact person(s) should have been be
Australian entity). in touch to discuss the migration of your relationship to MBE
if necessary, and will be in touch as soon as possible to
It is currently planned that UK clients will continue to be discuss novation options.
serviced by MBL LB. It is envisaged that, in due course,
MBIL will be wound down and that its UK relationships will 14. As a Futures client of CGM, how will my business
be migrated to MBL LB. be affected?
If you are based outside the UK, we will seek to minimise With the help of our clients, we have made good progress
the impact of our Brexit arrangements on clients over recent months to ensure that the necessary legal
and counterparties to the extent possible. Subject to documentation with MBE is in place and we want to thank
client agreement, this may include retaining client and you for your assistance to date. In parallel, we have been
counterparty relationships within MBL LB in cases where planning and preparing our operational run-book to ensure a
a licence or exemption may be, and may continue to smooth and efficient migration of client positions from MBIL
be, available in the relevant EU27 countries, potentially to MBE over the remainder of this year. We will stagger our
permitting UK-based banks and investment firms to continue client migrations over this period with first migrations starting
to service clients and counterparties located there. mid-September, targeting year end for completion. Our
teams will work with impacted clients to agree a mutually
If it is necessary to migrate the relationship (and, where suitable migration date over this period with your business
necessary, existing transactions) to MBE, your existing continuity being our priority.
primary relationship contact person(s) may change. UK-
located personnel based in Macquarie Group entities may 15. As a Specialised Asset Finance (SAF) client of CGM,
no longer be able to continue to provide all the services how will my business be affected?
they currently provide, and some activities may need to be
We do not anticipate any material impact on the provision of
assumed by personnel employed by MBE. For such cases,
this service to you as a result of Brexit.
we will have already contacted you separately to advise you
of the required migration and explain what is needed, which 16. As a client of Macquarie Capital, how will my
we anticipate will involve a repapering of the regulatory and business be affected?
contractual terms governing our relationship. In that context:
If any agreements are required to be novated to MCI, you will
• our due diligence will establish whether replicated be contacted directly to make any necessary arrangements
contractual terms will need to be entered into and and to discuss any changes to the transaction team
whether a novation is required, and we have advised providing services to you.
clients of the recommended approach;
1
For information about CGM and the activities it encompasses, please click here.Macquarie Group | Brexit Planning | Frequently Asked Questions
17. Will there be any impact on my physical trading UK energy regulator, there will not be any immediate UK
activities with Macquarie? REMIT reporting obligations, although all other obligations
of UK REMIT will be effective.
No material impact is anticipated on Macquarie’s physical
commodity trading activities, which will continue to be In order to be able to continue to meet EU REMIT
undertaken by MBL LB or Macquarie Products (Ireland) requirements, all counterparties will need to have a
Limited, as relevant. valid EU ACER (Agency for the Cooperation of Energy
Regulators) code if conducting REMIT activity in EU
18. Will there be a change to the current assets. Accordingly, if your current ACER code was
products and services I receive as a result of any obtained from the UK, you may need to re-register to
relationship migration? obtain an EU ACER code to remain compliant post-Brexit;
guidance on how to do this can be found here. We will be
It is our expectation that you will continue to be able
re-registering our UK ACER codes and will update you in
to access all relevant products and services offered
this regard as necessary.
by Macquarie.
20. Will MBE provide the same credit lines to clients as
19. What is the impact on regulatory reporting,
they currently have?
particularly if Macquarie performs delegated reporting
for me? Whilst MBE will have a dedicated risk teams to assess the
risk which each entity takes through an entity-specific lens,
Post-Brexit, the existing EU reporting requirements of
analysis will be undertaken using the same principles that
MiFID, EMIR and REMIT will be replicated in the UK, with
apply across the broader Macquarie Group.
applicable differences in scope and application between the
EU and UK versions. We will continue to provide any agreed Credit lines will continue to be assessed and approved
delegated reporting service for you. on the basis of individual creditworthiness. We do not
anticipate that existing credit lines will be materially
• European Market Infrastructure Regulation (“EMIR”)
impacted by changing the legal entity through which we
Macquarie Group entities providing clients a delegated conduct business.
reporting service for EMIR currently report to DTCC
21. Will there be any withholding tax impact of any
Derivatives Repository Limited (“DTCC UK”), a UK trade
relationship migration?
repository. Post-Brexit, DTCC UK will no longer be a
recognised trade repository under European Securities For the majority of products offered by MBE, it is not generally
and Market Authority (“ESMA”). Therefore, a new trade expected that, as a consequence of any relationship migration
repository has been established in Ireland, DTCC Data thereto from MBIL or MBL, any additional withholding tax
Repository Ireland (“DTCC EU”), to support EU EMIR should be levied, either on payments by MBE to its clients or
reporting. DTCC UK will remain to support UK EMIR vice versa (or that withholding tax imposed by jurisdictions
reporting. We are now set up with both DTCC UK and other than the UK will apply on such payments).
DTCC EU, to continue any relevant EU and UK EMIR
reporting obligations of ourselves and our clients pursuant In cases where additional withholding tax nevertheless arises,
to delegated reporting. then MBE will work with its clients to determine the position
and the appropriate action to be taken.
To support both EU and UK EMIR reporting, all accounts
and transaction reports will be migrated from DTCC UK For payments of interest by non-UK borrowers to MBE
to DTCC EU, and all relevant information associated with following any relationship and/or transaction migration,
UK EMIR will be copied over to DTCC UK. If you have set the withholding tax position may be subject to change,
up directly with DTCC to access your transaction reports, depending on, among other things, the country of residence
then you are likely to have been contacted directly by of the borrower, whether or not that country has entered into
DTCC with respect to this process. a double tax treaty with Ireland, and the availability of any
domestic law exemptions.
We will take all action which we believe to be necessary
in light of the regulatory and operational uncertainty Please note that Macquarie does not provide tax advice.
related to these potential regulatory changes to continue Accordingly, if you have any concerns about your withholding
to be able to deliver transaction reporting under EU tax position in respect of payments following any relationship
and UK EMIR for both ourselves and any delegated and/or transaction migration, you should contact your
reporting clients. tax advisor.
• Regulation on Wholesale Energy Market Integrity and However, if you require any further information about MBE,
Transparency (“REMIT”) then please contact us as described in the answer to
question 29.
Post-Brexit, EU REMIT will continue to apply, although the
scope of what is reported may change. In accordance
with guidance (available here) from Ofgem, the relevantMacquarie Group | Brexit Planning | Frequently Asked Questions
22. Will a new set of Terms of the Business Following any required relationship migration, your data will
be applicable? be used for the same purposes and in the same manner
as it was previously and will be processed in accordance
Impacted clients of MBE will have received updated Terms of with applicable data protection law. The privacy notices and
Business that apply to the services to be provided; clients can other information provided by or on behalf of MBL, MBIL and
access the updated Terms of Business, and various updated MCEL will continue to apply, but in relation to MBE or MCI,
ancillary documents, via the weblink referenced below. as applicable.
If you are a client of Macquarie Capital, your Terms of Business 26. As a depositor with MBE, will my deposits
will also be set out in any engagement agreement into which be protected?
you enter.
Eligible deposits held in accounts with MBE will be protected
In general, whilst there may be some differences between by the Irish Deposit Guarantee Scheme (“DGS”), administered
the Terms of Business which we apply to our UK and Irish by the CBI, up to a limit of EUR 100,000.
businesses arising from differences in applicable rules, these
sets of rules are based on common standards set by European The categories of deposits which are protected under the
law (especially in relation to MiFID investment services) and, in DGS up to that limit are set out on the DGS website.
practice, no material change to our obligations or the rights and
protections afforded to you by those rules is anticipated. Under the DGS, eligible depositors must be compensated (up
to the compensation limit) within 15 working days at present:
Our current Terms of Business can be found under ‘Terms and click here for details.
Policies’ here.
If you have any questions regarding the DGS, please visit the
23. How will the applicable Conduct of Business Rules DGS website, or contact the CBI by post (Deposit Guarantee
be affected? Scheme, Central Bank of Ireland, New Wapping Street, North
Wall Quay, Dublin 1, Republic of Ireland), telephone (1890 777
MBL LB, MBIL and MCEL are required to comply with the 777) or email (info@depositguarantee.ie).
FCA’s Conduct of Business Rules when providing regulated
services to you. 27. What further protection will be available to
Irish customers?
Following any required relationship migration, the FCA
Conduct of Business Rules will no longer apply to that Certain businesses with eligible customers will be afforded
relationship. Instead, Irish conduct of business rules (or those protection under the CBI’s statutory codes of conduct,
applicable to the location of the branch which may provide which include the Consumer Protection Code (CPC) and
services to you) may apply to the provision of certain services SME Regulations.
by MBE or MCI, as applicable.
An alternative dispute resolution mechanism is available
24. Will the Standard Settlement Instructions (SSIs) through the Financial Services and Pensions Ombudsman
change? (FSPO), where applicable. Details of this can be found via the
FSPO website here.
The new SSIs of MBE will be distributed via email as a PDF
document in due course. 28. How will complaint procedures be affected?
25. How will my data protection rights be affected? Our complaints procedures will not change as a result of any
relationship or transaction migration.
As both MBE and MCI are subject to the General Data
Protection Regulation (EU) (the “GDPR”) (as implemented 29. Who can I contact with questions?
in Ireland), it is not anticipated that any required relationship
migration will, of itself, materially affect the protection If you are a client of CGM, for any queries or comments
afforded to any personal data that we process in providing related to repapering (see the answer to question 12), please
services to you. contact us by email at macquariecgmbrexitrepapering@
macquarie.com. For all other questions or concerns
MBE or MCI, as applicable, will take over as the relevant regarding any of the information contained in this notice,
‘controller’ of that data for the purposes of the GDPR. please do not hesitate to contact us via your normal
relationship contact persons or by email at cgmbrexit@
macquarie.com.
If you are a client of Macquarie Capital, any queries
or comments should be directed to maccap.brexit@
macquarie.com.Macquarie Group | Brexit Planning | Frequently Asked Questions DISCLAIMER This information may not be reproduced, distributed or transmitted in whole or in part without the prior written consent of Macquarie. This communication is provided for information purposes only, is subject to change without notice and is not binding. This communication is not a solicitation to buy or sell any product, or to engage in, or refrain from engaging in, any transaction. Nothing in the information provided should be construed as legal, financial, accounting, tax or other advice. To the extent permitted by law, Macquarie accepts no responsibility or liability (in negligence or otherwise) for loss or damage resulting from the use of or relating to any error in the information provided. This information has been prepared in good faith and is based on information obtained from sources believed to be reliable; however, Macquarie is not responsible for information stated to be obtained from third party sources. This information is directed at institutional clients who have professional experience as defined by applicable law and/or regulation in the relevant jurisdiction. It is not for retail clients and it is not for distribution into any jurisdiction where this information is not permitted. MBL (including its branches) is authorised and regulated by the Australian Prudential Regulation Authority. MBL LB is authorised by the Prudential Regulation Authority, and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of its regulation by the Prudential Regulation Authority are available from us on request (FCA Firm No. 170934). MCEL is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 193905. MBIL is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Its firm reference number is 471080. Macquarie Bank Europe Designated Activity Company (“MBE”) is regulated by the Central Bank of Ireland. Macquarie Capital (Ireland) Designated Activity Company (“MCI”) is regulated by the Central Bank of Ireland. Other than MBL, any Macquarie entity referred to in this document is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). That entity’s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of MBE. © Macquarie Group 2020
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