Brexit ImplementationUK-based firms looking to
offer or sell financial products
in the EU.

On 31 December 2020, the Brexit Transition Period in place under the EU-UK Withdrawal Agreement came to an end.

The relationship between the EU and the UK is now governed by a Trade and Cooperation Agreement (TCA) and the UK has become a third country to the EU similar to China, Japan, Singapore, US and Switzerland.

Who is affected following Brexit

• UK-based firms looking to offer or sell financial products in the EU will be required to contract with an EU-based operator or create a genuine EU operation with substance.
• EU financial firms with business in the UK have the reverse problem – they will no longer be able to operate freely in the UK from the EU.
• Firms operating in both the UK and EU will need to navigate a costly and complex process to set up operations in the other jurisdiction.

Significant changes post Brexit

Passporting

Passporting is no longer possible between the UK and EEA. This affects firms and funds based in the UK that conduct certain types of business in the EEA, and firms and funds based in the EEA that carry out certain types of business in the UK.

MiFID Tied-Agents

It is no longer possible for UK firms to exercise rights to use tied agents to provide services in other EEA States. Likewise, EEA MiFID investment firms are no longer able to exercise passporting rights to use tied agents to provide services in the UK.

UCITS

UK UCITS have lost their legal status as UCITS under EU law. UK UCITS no longer have an association with the UCITS Directive. Any UCITS managed by UK managers have lost their UCITS status (and are treated as AIFs) and are no longer marketable to retail investors on the basis of a passport. Whether it is possible for a UK UCITS management company to continue managing an EEA UCITS depends on the position under EU law and the law of the country in which the EEA UCITS is domiciled.

Whatever position you are in the above spectrum from high-profile transactions to regulatory issues and complex litigation, we harness our knowledge to continue to provide information in relation to these changes across multiple legal disciplines to provide a holistic perspective for finding the right solution for you and keep up to date with any further developments.