Brexit has been triggered and the UK’s exit negotiations with the European Union are now under way. Now we’re looking at a two-year period during which an agreement needs to be reached between the UK and the EU regarding their future relations. The next round of Brexit negotiations began on 25 September 2017.

What implications will this have for Deutsche Börse and its clients?

Berthold Kracke: When we look at the financial industry, there is a lot of uncertainty regarding the future set-up of the post-Brexit world – in particular, when it comes to questions of location, regulation and access to the EU27 market. We have therefore set up a dedicated Brexit Transition Team, which will look into all aspects of Brexit, potential implications for our customers as well as how this will affect our own set up vis-à-vis our clients. Our goal is to support our clients as a reliable and trusted partner to guide them through these turbulent and uncertain times. This is, of course, particularly important for those entities currently located in the UK, which will potentially be most strongly affected by Brexit. If necessary, we will also help them to make the relocation to the EU27 or to restructure their organization to fit the new realities.

What are the key questions or aspects that clients need to resolve?

Berthold Kracke: From our conversations with customers, I think that the biggest issue for market participants currently is that we still know so little about the likely outcome of these negotiations. There is a number of different possible scenarios and you have to be prepared for all of them. The challenge is that by the time we do know what direction things are going in, there will not be much time left. The EU intends to wrap up the negotiations already by October 2018 to allow for sufficient time for ratification procedures. Customers therefore need to start their preparatory work now in order to be ready for any kind of Brexit scenario. I think, in the end this all comes down to one question: “How will we be able to do business in the future?” This is exactly where we come in.

How do you support your customers throughout this process?

Berthold Kracke: Our ultimate goal is to support our customers in implementing a strategy and set-up that allows them to reduce the risks arising from this major geopolitical event. A set-up that allows them to be confident regarding their future business in a post-Brexit world – whatever the outcome of the negotiations is in the end.

To take such an important decision, it is key to have an understanding of the different potential Brexit scenarios that we might face. We therefore started out by conducting initial client meetings to get a better understanding of their needs, discuss core questions and ‘pain points’ with them and provide an overview of potential future scenarios. Together with the client, we then assess what impact these would have on their business, the feasibility of their options, and help them translate their Brexit strategy and goals into concrete transition measures that fit their very specific needs.

In the end, we will tailor an individual transition plan for each customer. Ideally, this will already include a comprehensive overview of everything that needs to happen in order to ensure that they can continue to conduct business with us in a post-Brexit world.

How do you handle this within Deutsche Börse Group?

Berthold Kracke: Indeed, internally this requires a highly complex coordination effort across a variety of different entities of the Group. This coordination is currently handled by a smaller core team of onboarding experts, but we have involved colleagues from the various areas, covering the entire value chain of Deutsche Börse’s services – from trading to clearing, settlement and data services, from legal and regulatory experts to our sales colleagues as well as technical support. Our goal is to take some complexity out of this process for our customers.

Because – one must of course not forget – our clients already have so many different topics and parties to deal with when it comes to preparing for Brexit. We as their infrastructure provider are only one of them. By providing them with “one face to the customer”, i.e. one point of contact with whom to discuss all their transitions needs and queries related to Deutsche Börse Group, we try to make life as easy as possible for our clients.

What would you consider the biggest challenge?

Berthold Kracke: Usually, if you set up, for example, a new member on the clearing side, you do this step-by-step. This process takes some time, as the member also needs to align internally within his organization. Further, some potentially required process steps have an external dependency and need some lead time. Now, with Brexit ahead of us, we have to transfer the entire institution at once. And not just that – we will be working with a large number of members within a very tight time frame. So, it’s also about the volumes that need to be moved. The conversations with our customers thus help us to get an overview of the demand and the number of requests that we will be facing, so that we’re prepared to make the transition as smooth as possible.

…and at the same time, the implementation of MiFID II/MiFIR is still ongoing, potentially impacting our trading and clearing members as well. So, what we do is help our customers navigate these stormy seas of regulatory transformation, trying to make their life a little easier.