Hard Brexit Impact Analysis

Page 39 of 106 Category If no agreement is reached: Consequence EU Document Finance financial instruments As of the withdrawal date, the EU rules in the field of MiFID investment services and activities no longer apply to the United Kingdom. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS Finance financial instruments As of the withdrawal date UK investment firms will no longer benefit from the MiFID authorisation6 to provide MiFID investment services and activities in the Union (they will lose the so-called "EU passport") and will be third-country firms. This means that those investment firms will no longer be allowed to provide services in the EU on the basis of their current authorisations. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS Finance financial instruments EU 27 subsidiaries: As of the withdrawal date (legally independent companies established in EU 27 and controlled by or affiliated to investment firms established in the United Kingdom) can continue to operate as EU investment firms if they have a MiFID authorisation in one of the EU Member States. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS Finance financial instruments Branches: As of the withdrawal date Branches in the EU 27 of UK established investment firms will be branches of third country investment firms and will need to comply with national requirements applicable in the Member State where the branch is established or with the regime set in Article 39-41 MiFID II where applicable. The provision of services / activities is limited to that Member State's territory. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS Finance financial instruments As of the withdrawal date UK market operators / investment firms operating a trading venue or execution venue will no longer benefit from the MiFID authorisation/licence. UK based regulated markets (RMs), multilateral trading facilities (MTFs) or systematic internalisers (SI) will thus cease to be eligible venues for trading shares subject to the MiFIR share trading obligation; EU counterparts can no longer undertake trades in shares subject to the trading obligation on such platforms. WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS Finance financial instruments As of the withdrawal date UK based RMs, MTFs or organised trading facilities (OTFs) will cease to be eligible venues for the purposes of the MiFIR derivatives trading obligation12 and EU counterparts will no longer be able to undertake trades on these platforms. In both cases, EU counterparts would need to reassess their trading arrangements to WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF MARKETS IN FINANCIAL INSTRUMENTS