IFR Article Cites Akin Gump Client Alert on Brexit
International Financing Review, in its article “Common-sense outcomes emerge for capital markets in Brexit discussions” cited a recent Akin Gump client on Brexit and the EU’s Markets in Financial Instruments Directive (or MiFID).
The article reports that, following a short period of uncertainty for the capital markets, there is now a more tempered mood as to the future of the regulatory environment. The Akin Gump alert, “Light at the End of the (Channel) Tunnel,” discusses arrangements for MiFID II passporting, noting that “in the event of full exit, the UK could become a third country under MiFID, and UK firms registered with ESMA would become third-country firms under Article 46 of MiFIR.” According to the article, this would mean that UK firms could still benefit from the MiFID II passporting regime “and provide investment services or perform investment activities in respect of eligible counterparties and professional clients on a cross-border basis throughout the EU.”
The article proceeds to quote from the Akin Gump alert on how the decision to recognize the UK “as having financial regulation with ‘equivalent effect’ to that in the EU is entirely within the gift of the Commission.” The only reason for the EC to refuse that equivalence determination, the alert says, “will be political.” Assuming no complete breakdown in the relationship between the UK and EU following a British departure, the article, again quoting from the Akin Gump alert says, “there is reason to believe that pragmatism will prevail.”
To read the original client alert, please click here.