FMLC: Robustness of Financial Contracts after Brexit
Since the U.K. voted to withdraw from the E.U., a question which has been raised by many market participants and observers, in the context of a hard Brexit, is whether the performance of existing financial contracts would continue or whether Brexit would make their performance illegal, impractical or impossible in some way.
This paper takes an in-depth look at the question of the continuity of legacy contracts and highlights the legal uncertainty which will arise if there is no clarity as to the future of the U.K.-E.U. relationship post-Brexit.
The Financial Markets Law Committee, an educational charity based in the City of London dedicated to the sound administration of financial law, also examined some of the ways by which these issues might be mitigated, both by firms themselves and through legislative action.
UK CCPs may be equivalent for 12 months in the event of a no-deal Brexit.
The clearing capability will be for listed derivatives and OTC products.
Luxembourg-based REGIS-TR aims to maintain a continuous service after Brexit.
A limited exemption is needed to novate some contracts in a no-deal Brexit.
Eurex is building an EU27 solution for clearing OTC IRS products after Brexit.