Brexit and its impact on the cleared derivatives markets: a primer
03 augustus 2020
The UK left the EU on 31 January 2020 and is in a transitional period that ends on 31 December 2020. During this period, EU law continues to apply in and to the UK and UK financial services firms continue to benefit from all existing EU rights, as do EU firms operating in the UK.
At the end of the transition period, in the absence of any agreement to the contrary, EU law will cease to apply in and to the UK, the UK will become a third country under EU law and the EU will become a third country for the purpose of UK legislation.
This event has raised many questions for FIA members globally: what will be the impact for financial firms in the provision of cross border services after the transition period ends? How will access to central counterparties, trade repositories and trading venues be affected? And what steps should firms take in the next five months to prepare for these changes?
In this paper, Allen & Overy LLP outlines at high-level the near-term consequences for the cleared derivatives industry and practical next steps firms should take.
This paper was first published by FIA on 29 July 2020.