MiFIR – ESMA and FCA Statements on Impact of Brexit on Trading Obligation for Shares

On 29 May 2019, ESMA published a revised statement outlining its approach in the event of a no-deal Brexit, to the application of the trading obligation for shares under Art 23 of MiFIR in the absence of an equivalence decision by the European Commission relating to the UK.

The FCA published their response and stated that the risk of disruption from potentially conflicting EU27 and UK STO is not mitigated by the revised ESMA approach given that Art 23 of the onshored MiFIR implies overlapping obligations for firms.

In the absence of reciprocal equivalence, applying both UK and EU STOs in a way that maintains the status quo for a given time after exit remains an alternative way of mitigating disruption while longer term solutions are found.
The FCA wishes to engage constructively with ESMA and other European authorities. The FCA adds that, if there is no equivalence determination, it will engage with market participants and trading venues about steps to protect the integrity of UK markets and to ensure that participants in the UK can continue to achieve high standards of execution for their clients, including when trading EU27 shares.

Statutory Instruments Relating to EU Exit

On 21 June 2019, the Statutory Instruments for The Mutual Assistance on Customs and Agricultural Matters (Revocation) (EU Exit) Regulations 2019 and the Customs (Revocation of Retained Direct EU Legislation, etc.) (EU Exit) Regulations 2019 were laid before Parliament and published on the legislation website by HMRC.