Service Navigation

Brexit

Brexit

On 23 June 2016, the British citizens voted that the country should leave the European Union. On 29 March 2017, the United Kingdom notified in a letter to the European Council its intention to leave the European Union. With this notification, Article 50 of the EU treaty was applied for the first time, so that EU membership is expected to end on 29 March 2019. Since the announcement, negotiations have been underway on the terms of the separation of the EU and the UK, as well as on the future relationship between the two parties.

Consequences

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 percent of the EU activity in financial market segments.1)

Although EU law will continue to apply to the UK during the ongoing negotiation phase, it is currently uncertain which regulatory conditions will apply to participants in the financial markets after Brexit. The uncertainty among market participants will remain until the conditions under which the UK will leave the EU become certain. UK-based financial firms will likely lose their existing EU passporting rights to conduct business with EU 27-based clients, if no transitional provisions are agreed between the UK and the EU that would maintain these rights after Brexit.

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 equivalent substitute to the EU passport.

Following Brexit and during a possible transition phase, it is important that the EU remains competitive internationally while upholding financial stability. Therefore, deregulation (“race to the bottom”) and regulatory arbitrage (“cherry picking”) must be avoided.

We stand by our customers as a strong partner during the Brexit transition process

Brexit member readiness

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

Deutsche Börse Group closely monitors and analyses every step of the Brexit process. In addition, we discuss the potential effects of the Brexit with our customers and take part in discussions with industry associations. For Deutsche Börse Group, it is of paramount interest that our UK-based clients continue to have access to our infrastructure.

At the same time, we provide support to customers who plan to relocate their business to the EU. We have set up a Brexit Transition Team to meet these needs and to ensure Brexit member readiness. In preparation, we also launched the Brexit Readiness project, which ensures Deutsche Börse Group’s access to the UK market. To this end, we are in close contact with the responsible authorities in order to obtain the required authorisations for our various business areas.

With the Partnership Program of the central counterparty (CCP) Eurex Clearing, Deutsche Börse Group has developed a market-led alternative to the clearing of interest rate swaps within the EU. The programme was designed in close cooperation with market participants (such as trading firms, end customers and trading platforms). It has already expanded to cover the repo segment and will cover other products in the future.

Eurex Clearing and its customers share both the programme’s economic success and the governance of the CCP. They thereby bear joint responsibility for building a liquid market.

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

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

 

Brexit: the highlighted parts of the value chain are affected

Deutsche Börse Group reaches milestone in Brexit preparations

Great Britain

Various exchanges of Deutsche Börse Group have been granted the Recognised Overseas Investment Exchange (ROIE) status by the Financial Conduct Authority (FCA). This completes an important milestone in Deutsche Börse Group’s Brexit preparations.

Research: Brexit impact on investment banking in Europe

The UK’s withdrawal from the EU will have a significant impact on the financial industry, as London is currently the Union’s main financial centre. According to a recent study by Deutsche Bank, investment banking will be affected in particular by the consequences of Brexit.

Brexit Transition Team: help customers navigate these stormy seas

London

Deutsche Börse Group set up a dedicated “Brexit Transition Team” which has the main goal to help our clients with the implementation of their Brexit strategy and to ensure a smooth migration to the post-Brexit world.

The Brexit and the impact for financial markets

The Brexit process, timeline and impact – explained for you.