The lack substantive rules addressing financial services in the EU-UK Trade and Cooperation Agreement creates some confusion and challenges for firms. We've developed a free to download whitepaper that examines a range of scenarios for how firms with a UK- and EEA-based presence might structure their business in a post-Brexit world.
Following the 31 December 2020 transition-period deadline, the UK officially ended ties with the European Union, notwithstanding a late agreement on trading arrangements. While this avoided a full no-deal scenario, the agreement failed to include any significant mention of rules governing the financial services, aside from a broad commitment to seek a co-operation framework agreement in the near future.
As a result, the UK is now classed a ‘third country’ for purposes of the EU’s MIFD, AIFMD and UCITS Directives. As no equivalence determination has yet been conferred, this means that firms have, as yet, no possibility of access to the so-called third country passport regime under Article 47 of MiFIR, nor is there an extension of passports under Article 67 of AIFMD. With this new certainty, albeit a bracing one, firms must now activate their longer-term contingency plans.
From the perspective of European firms, the UK Temporary Permissions Regime (TPR) and Temporary Marketing Permissions Regime (TMPR) will allow existing inbound European Economic Area (EEA) firms and funds respectively to continue regulated business in the UK, subject to conditions and on a time limited basis. This means that the marketing of funds in the UK can proceed on the same basis as before exit day (so long as the fund(s) were already registered).
Although Brexit will no doubt impact the landscape of the UK financial markets, we believe that the City of London will continue to remain a world leading venue for finance and commerce.
With all this in mind, we’ve developed a whitepaper that examines a range of scenarios for how firms with a UK- and EEA-based presence might structure their business in a post-Brexit world.