This paper analyzes options in financial market law available to British issuers, credit institutions, insurance companies, securities firms, and asset and fund managers in terms of Brexit, considering that the United Kingdom will become a third country from the perspective of the European Union. Whether London will continue to be the centre for European financial transactions will depend on its access to the Single Market. British companies will achieve market access via equivalence, by setting up a European subsidiary, through bilateral agreements and by passively using the fundamental freedom of services. The way to be taken will depend on the respective line of businesses and groups of customers.  

Nevertheless, even after Brexit, British companies will have to obey certain European laws if they want to maintain access to the Single Market. Moreover, future autonomous British law making will not be free from coordination with the Continent in order to ensure market access. Brexit will not impact all business models to the same extent; depending on the services offered, the clients served and the countries targeted, fundamental changes to the business model are to be expected (for example, a relocation of the European hub from London to the Continent, in particular in the banking and primary insurance markets), while, in other cases, the provision of services from London to the Continent may continue to function with few additional barriers, even in the status post-Brexit.

Part of Series

Brexit: The International Legal Implications is a series examining the political, economic, social and legal storm that was unleashed by the United Kingdom’s June 2016 referendum and the government’s response to it. After decades of strengthening European integration and independence, the giving of notice under article 50 of the Treaty on European Union forces the UK government and the European Union to address the complex challenge of unravelling the many threads that bind them, and to chart a new course of separation and autonomy. Brexit necessitates a deep understanding of its international law implications on both sides of the English Channel, in order to chart the stormy seas of negotiating and advancing beyond separation. The paper series features international law practitioners and academics from the United Kingdom, Canada, the United States and Europe, explaining the challenges that need to be addressed in the diverse fields of trade, financial services, insolvency, intellectual property, environment and human rights.
  • Matthias Lehmann is a full professor and director of the Institute for Private International and Comparative Law at the University of Bonn. He holds doctoral degrees from the Friedrich Schiller University Jena and Columbia University, as well as a habilitation from the University of Bayreuth.

  • Dirk Zetzsche is a full professor and holds the Appui au Développement Autonome Chair in Financial Law (Inclusive Finance) at the University of Luxembourg, as well as a non-executive directorship at the Center for Business and Corporate Law at the University of Düsseldorf.