The state of Brexit
With all the political uncertainty around Brexit, such as the continued lack of support for Theresa May’s Brexit plan and rebel Labour MPs establishing a new political party, many fear that the possibility of Britain crashing out of the EU without a deal is becoming increasingly likely. As a result, many European countries have triggered contingency plans of their own.
To limit the negative impact of a no-deal Brexit, some EU governments, including Luxembourg, France, Germany, Italy, the Netherlands and Ireland, have adopted and/or amended national laws to ensure that UK-based asset managers can continue serving their clients.
According to the Financial Times, each country is trying to implement policies mirroring the so-called temporary regime that was introduced by the UK government, which allows EU asset managers to continue operating within the UK. The temporary permissions regime (TPR) concerns EEA firms and funds operating, providing services or marketing funds in the UK and allows them to benefit from it provided they notify the UK regulator(s) by exit day, 29 March (see here for more details).
Luxembourg has put forward a draft law that covers the necessary measures that must be taken with respect to the financial sector in the event of a hard or no-deal Brexit. Following the Draft Law N°7401, the Commission de Surveillance du Secteur Financier ("CSSF") and the Commissariat aux Assurances ("CAA") are allowed to take certain temporary measures in order to maintain the stability and functioning of the financial markets.
In addition to the MoUs signed between ESMA and UK financial regulators, the EU is urging all companies to start preparing for Britain’s exit from the European Union. In the case of a no-deal scenario and without a transition period, trade relations between the UK and the bloc will fall under the general WTO rules as of 30 March 2019.
To make sure that you are prepared for Brexit, please check the European Commission’s Customs guide for businesses.
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