BCLP Banking Blog

Bank Bryan Cave

Brexit

Main Content

UK Must Get to Grips with Brexit and MiFID II

Asset Managers Face Some Difficult Decisions

2017 is proving to be a stressful and costly year for asset managers. The terms of the UK’s exit from the EU will continue to be the subject of extensive debate, both politically and in the press. At the same time, MiFID II is just around the corner, coming into force in January 2018 after having been put back a year due to the complexity of its implementation.

MiFID II recasts and broadens MiFID (the EU’s Markets in Financial Instruments Directive) in response to the financial crisis. It will change the way asset managers operate and not just in terms of enhanced investor protection. The new rules affecting allocation of costs for research, the impact on the fixed income market, the prohibition on payments to financial advisers and the new significantly more onerous reporting requirements are all major issues for the industry players to deal with. One commentator has estimated that MiFID II will cost the financial services industry more than EUR 2.5 billion to implement. And smaller players will be hit hardest, having less ability to absorb these hefty costs.

As for the UK’s proposed exit from the EU (the UK has yet to formally pull that trigger) we can expect the UK’s financial services industry to be significantly impacted. However, quite what that impact will be is as yet unknown and will depend on what model is eventually negotiated for the relationship between the UK and the EU in place of the UK’s current position as a full member of the EU. Of particular relevance for asset managers will be what the UK’s access to EU markets will look like. Currently, asset managers along with other UK authorised firms have full access to EU markets under passporting rights, which allow them to carry on business in another EEA state whether or not through a branch.

Read More

Brexit: Stay Calm, but Be Prepared for Changes

We have all woken up on June 24th to the surprising news that the UK has voted to leave the European Union following a contentious referendum.  The vote was very close, with 52% voting to leave and 48% voting to remain.  Markets are reacting with volatility, as might be expected, and British Pound Sterling values have sunk overnight to a historic 30 year low against the dollar.  To add to the turmoil, David Cameron, the British Prime Minister, has announced that he will be stepping down with his successor to be in place by the October Conservative Party conference.

That said, nothing is going to happen immediately.  There is a very specific legal process for Brexit and the timeline is hardly swift.  As the first step, the UK has to give notice to leave under Article 50 of the Lisbon Treaty.  Based on the Prime Minister’s announcement this morning and questions surrounding who might lead the negotiations on the terms of the UK’s exit from the EU, that notice may not be given for many weeks, if not months. That notice is also just the commencement of the process. Once notice has been given, there is then a two year period in which to negotiate the terms of an exit Treaty.

Our colleagues have posted more details on the Brexit process on Bryan Cave’s EU & Competition blog.

Read More
The attorneys of Bryan Cave Leighton Paisner make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.