Alongside the continuing challenges of COVID-19 for businesses and communities globally, Brexit has returned prominently to the headlines in recent weeks as the deadline for agreeing a trade deal draws closer. With the chief negotiators continuing to report little progress on the key issues in the negotiations, it appears increasingly likely that there will be no agreement in respect of financial services by the end of this year. In the absence of any form of agreement, reliance may sought to be placed on the existing EU equivalence framework in seeking to minimise disruption to EU-UK trade in financial services.
In this context, as part of Matheson's thought leadership on Brexit, partners from across our financial services teams have come together to produce an in-depth paper on how the existing EU equivalence framework operates - and whether or not it offers a solution to the many challenges for financial services arising from the UK's withdrawal from the EU. Our partners have also created individual briefing notes summarising the expected legal impacts arising from no agreement on financial services being reached by year-end for each of the areas of: investment funds, insurance, derivatives clearing, banking, MiFID firms, fintech and payments; together with an analysis of equivalence as a viable or relevant mechanism in each case.
Whilst the best outcome for all businesses continues to be for a deal to be reached, the risk of a no-deal Brexit on 1 January 2021 remains high and, consistent with our previously expressed view, preparation for this scenario is advised.
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