How Does It Feel to Be a Third Country? The Consequences of Brexit for Financial Market Law

CIGI & BIICL, Brexit: The International Legal Implications | Paper No. 14

28 Pages Posted: 30 Apr 2018 Last revised: 19 May 2018

See all articles by Matthias Lehmann

Matthias Lehmann

University of Bonn

Dirk A. Zetzsche

Universite du Luxembourg - Faculty of Law, Economics and Finance; Heinrich Heine University Dusseldorf - Center for Business & Corporate Law (CBC)

Date Written: April 15, 2018

Abstract

This paper analyzes options in financial market law available to British issuers, credit institutions, insurance companies, securities firms, and asset and fund managers in terms of Brexit, considering that the United Kingdom will become a third country from the perspective of the European Union. Whether London will continue to be the centre for European financial transactions will depend on its access to the Single Market. British companies will achieve market access via equivalence, by setting up a European subsidiary, through bilateral agreements and by passively using the fundamental freedom of services. The way to be taken will depend on the respective line of businesses and groups of customers.

Nevertheless, even after Brexit, British companies will have to obey certain European laws if they want to maintain access to the Single Market. Moreover, future autonomous British law making will not be free from coordination with the Continent in order to ensure market access. Brexit will not impact all business models to the same extent; depending on the services offered, the clients served and the countries targeted, fundamental changes to the business model are to be expected (for example, a relocation of the European hub from London to the Continent, in particular in the banking and primary insurance markets), while, in other cases, the provision of services from London to the Continent may continue to function with few additional barriers, even in the status post-Brexit.

Keywords: Brexit, Financial Law, European Passport, Financial Centre, Credit Institutions, Asset Managers

Suggested Citation

Lehmann, Matthias and Zetzsche, Dirk Andreas, How Does It Feel to Be a Third Country? The Consequences of Brexit for Financial Market Law (April 15, 2018). CIGI & BIICL, Brexit: The International Legal Implications | Paper No. 14, Available at SSRN: https://ssrn.com/abstract=3155355

Matthias Lehmann

University of Bonn ( email )

Institute of Private International Law
Adenauerallee 24-42
Bonn, 53225
Germany
+49228737100 (Phone)
+49228739180 (Fax)

HOME PAGE: http://www.jura.uni-bonn.de/index.php?id=7208

Dirk Andreas Zetzsche (Contact Author)

Universite du Luxembourg - Faculty of Law, Economics and Finance ( email )

Luxembourg, L-1511
Luxembourg

HOME PAGE: http://wwwen.uni.lu/recherche/fdef/research_unit_in_law/equipe/dirk_andreas_zetzsche

Heinrich Heine University Dusseldorf - Center for Business & Corporate Law (CBC) ( email )

Universitaetsstr. 1
D-40225 Düsseldorf
Germany
+49 211 81 15084 (Phone)
+49 211 81 11427 (Fax)

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