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Brexit

Brexit

On 23 June 2016, the British population voted that the country should leave the European Union, with a small majority. On 29 March 2017, the British Prime Minister, Theresa May, notified in a letter to the European Council the United Kingdom’s intention to leave the European Union. This notification starts the official withdrawal process under Article 50 of the Treaty with a two-year period during which the EU and the UK will negotiate the terms of Brexit. Even though we very much regret this decision, we are determined to make the best of this outcome for the financial centres concerned and for Europe.

Brexit member readiness

Updates, user guides, presentations, checklists and the migration calendar.

Objective

The European Union and UK financial markets are strongly interlinked. The UK financial market currently acts as a wholesale hub for other EU financial centres and accounts for almost 80 % of EU activity in financial market segments1).

The negotiations between UK and EU are challenging. EU law will continue to apply in the UK during the negotiation period, but uncertainty for market participants will continue until the terms of the UK’s withdrawal (including any transitional arrangements) are agreed.

UK-based financial firms will likely lose their existing EU passporting rights to conduct business with EU 27-based clients, if no transitional provisions or treaties are agreed between the UK and the EU that would maintain these rights.

Third-country rules, incorporated in EU financial regulations (e.g. MiFID II / MiFIR, EMIR, CSDR), are designed to provide access for non-EU firms to EU financial markets. However, third-country rules are not an exact substitute to the EU passport.  

It is important that Europe remains competitive internationally while upholding financial stability. Therefore, deregulation (“race to the bottom”) and regulatory arbitrage (“cherry picking”) must be avoided.

Video: Being constructive in times of uncertainty. The Deutsche Börse and the Brexit challenges.

 

Time line

On 23 June 2016, the UK voted to leave the European Union. The formal withdrawal process according to Article 50 of the Treaty on the European Union was triggered by the UK on 29 March 2017. The two-year period during which the EU and the UK will negotiate the terms of Brexit has started.

1) According to the FESE European Equity Market Report 2016 around 54 % of the European equity trading was executed in UK. The UK handles 77 % of euro-denominated derivatives transactions, according to the Bank for International Settlements data on over-the-counter trades. Around 78% of European FX trading, 74% of European interest rate derivatives trading and 50% of European fund management activities (by assets) take place in the UK.

Brexit: the highlighted parts of the value chain are affected

Research: Brexit impact on investment banking in Europe

The UK’s exit from the EU will have significant repercussions on the financial sector, notably investment banking. London as the primary European hub is likely to lose its full access to the single market. Read more on the biggest impacts in Deutsche Banks’ research paper.

Brexit – what now?

Great Britain

Brexit covers all types of financial activities between the United Kingdom and the 27 EU member states. What is the status of the negotiations and what is the expected impact on the financial sector? Learn more.

New UK White Paper on Brexit

The latest White Paper (July 2018) covers the future relationship between the United Kingdom and the European Union from as presented to the Parliament.

Draft withdrawal agreement between published

Europe

The document published by the European Commission is a draft of the agreement on the UK’s orderly withdrawal from the EU. It will now be discussed by the European Council and with the Brexit Steering Group of the European Parliament before being transmitted to the UK for negotiation. A final version should be agreed by October 2018.

Help customers navigate these stormy seas

Berthold Kracke

Berthold Kracke, head of Deutsche Börse’s Brexit Transition Team, gives some insights on how the Group is gearing up for Brexit and how it can help its customers in this.

Brexit in simple terms


Just in time for the third round of Brexit negotiations this video explains the complicated Brexit process in an easy-to-understand manner.

The Brexit and the impact for financial markets

The Brexit process, timeline and impact – briefly explained.

Deutsche Börse will accompany its clients throughout the Brexit process

London

We will closely monitor and analyse the Brexit process and actively discuss its impact with our clients and industry associations.

Further information