The UK left the EU on 31 January 2020 and is in a transitional period that ends on 31 December 2020. During this period, EU law continues to apply in and to the UK and UK financial services firms continue to benefit from all existing EU rights, as do EU firms operating in the UK.
At the end of the transition period, in the absence of any agreement to the contrary, EU law will cease to apply in and to the UK, the UK will become a third country under EU law and the EU will become a third country for the purpose of UK legislation.
This event has raised many questions for FIA members globally: what will be the impact for financial firms in the provision of cross border services after the transition period ends? How will access to central counterparties, trade repositories and trading venues be affected? And what steps should firms take in the next five months to prepare for these changes?
In this paper, Allen & Overy LLP outlines at high-level the near-term consequences for the cleared derivatives industry and practical next steps firms should take.
The paper discusses the impact of Brexit on the UK and EU legislative frameworks, provides an overview of equivalence assessments and what the possible outcomes mean for FIA member firms, as well as steps market participants should take to address policy and procedure, contractual and operational issues.
We appreciate that this event is likely to present many issues for members globally, particularly those based in the UK and the EU, and FIA will continue to expand its support for members during this process of change, providing information, webinars, thought leadership and advocacy on behalf of members throughout the transition process and afterwards.
