Iceland: Capital account liberalisation - update
Clearstream Banking1 updates customers on the current situation in Iceland.
Background
In March 2019, the Act no. 14/2019, that amends the Foreign Exchange Act, no. 87/1992, and the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, was passed and entered into force. Since then Clearstream Banking has been working with the local authorities to validate appropriate processes that would allow Clearstream Banking to reactivate the activity in Iceland and remove the capital restrictions still in place on assets held by customers of Clearstream Banking.
Impact on customers
Further to the change in regulatory and compliance framework that took place since the first activity slowdown in 2016, the restore of the activity involves new requirements to be fulfilled, and that has prevented immediate reactivation and the removal of the restrictions at Clearstream Banking until today.
Thanks to productive dialogue with the local authorities, the Central Bank of Iceland, the Tax Authorities and the Ministry of Finance in particular, significant progresses have been achieved that should enable Clearstream Banking to restore the activity progressively. An amended Bill is currently being proposed to the Parliament by the Ministry of Finance. Clearstream Banking trust that the new Bill provide necessary framework to define appropriate operational processes and has collaborated to the public comments in that respect. Reactivation will be considered in phases, and in line with agreement reached for each category of assets, namely the non-taxable bonds, the equities and the taxable bonds. Clearstream Banking expects to be able to deliver the first phase in Q1 2020 if the local conditions for doing so are met.
Clearstream Bankingalso believes the new Bill represents a successful achievement in facilitating the access of the Icelandic market for foreign investors.
Further information
Detailed information will be provided as it becomes available.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.