Brexit update for financial services firms - following Parliamentary vote on the Withdrawal Agreement

As expected, the British Government failed to secure support for the Withdrawal Agreement (WA) (which is linked to the Political Declaration on the future framework (PD)) in the delayed ‘meaningful vote’ in the House of Commons. The scale of the government’s defeat has left a volatile political situation with considerable confusion and uncertainty about the implications for the Brexit process, as has been widely discussed in the media.

Whatever the mood in Westminster and the response from Brussels, there is clearly no agreement (or even a consensus) between the UK and EU that Brexit cannot proceed without a WA being in place. Article 50 provides that exit will take place on a ‘no deal basis’ if the notice expires without a WA being in place. Even if current UK legislation providing for exit on 29th March is overridden at Westminster, this will not change the position under Article 50. Even if exit under Article 50 is delayed by agreement between the UK and the 27 other member states, this will not remove the no deal risk which is inherent in the Article 50 process. Volatility and the increased no deal risk from the rejection of the negotiated WA will therefore continue for some time yet, even if consensus were to consolidate at Westminster around alternatives to the WA and PD.

For firms looking at no deal preparations, we have produced an updated RegZone database containing no deal legislation (and other measures) in the financial services sector. It covers EU measures and those in the UK (but not in other Member States). It covers transitional measures and the extensive UK legislation (primary, secondary and at regulator level) to onshore EU regulation and adapt the regulatory regime for exit. Each identified measure is tracked, giving its current status from draft/proposal through to adoption. Links are provided to the legislation, to explanatory material from official sources and to RegZone analysis on each topic.

Click here to access the RegZone no deal database.

CMS RegZone publishes weekly updates (available via email, on-line and via Twitter) on Brexit developments for financial services firms. These provide analysis and commentary on significant developments during the week in question. A daily digest of Brexit news (without analysis or commentary) is also available by email here and online via the RZ news wizard here (both of these can be filtered using the Brexit topic). Links to publications are contained in each update; publications released before the updates commenced in April 2018 can be found in a bibliography here. CMS RegZone publication ‘Where we stand’ provides an overview of the current position in a single report; this is updated regularly to take account of the key developments from the weekly updates.