AFME has an ongoing programme of work dedicated to highlighting the impact of Brexit for pan-European capital markets.
Through our work, we seek to inform regulators and policymakers about the potential impact of Brexit on our members and their clients, with a particular focus on the importance of maintaining market efficiency and financial stability.
AFME’s position on Brexit
AFME takes a firmly fact-based approach in our engagement on Brexit, acting as a bridge for conveying market expertise and insight to policymakers and regulators across Europe.
Our work has assessed the implications for banks and end users of wholesale markets and identified a number key issues for maintaining the integrity of financial markets across Europe throughout the Brexit process:
- Clear transitional arrangements: We are strongly in favour of clearly defined transitional arrangements that will allow for an orderly transition, avoid ‘cliff edges’ and ensure the stability of financial markets during the UK’s withdrawal.
Such arrangements should comprise a bridging period where existing structures and regulations continue while the UK and EU27 negotiate their future trade relationship, as well as an adaptation period to allow businesses time to adapt to the new trading environment.
They would need regulatory and legal underpinning to give businesses the level of certainty they need.
- Continuity of existing contracts: Providing certainty of the continuity of existing financial contracts after the UK’s withdrawal, such as for swaps and loans would remove a significant source of uncertainty and potential disruption for banks and clients.
- Regulatory clarity: We would call on regulators and policymakers to provide clarity as to their requirements and take a pragmatic and flexible approach to assisting firms in adjusting to post-Brexit requirements.
Regulators can help to minimise the disruption of any Brexit restructuring that might be needed by providing firms with as much clarity as possible about what arrangements they will need to put in place.
It is inevitable that there will be some regulatory uncertainty throughout the Brexit process. But approaches such as accelerating approval processes e.g.for new licences and pre-approving business models that firms can use, are examples of how a flexible approach could work.
House of Lords Evidence
On 18th October, AFME Chief Executive, Simon Lewis, gave evidence to the House of Lords EU Financial Affairs Sub-Committee on regulation and supervision of financial services post-Brexit - Click here to watch
Effective flow of personal data post-Brexit (April 2018)
Brexit: Key cliff edge risks in wholesale financial services (January 2018)
Impact of Brexit on cross-border financial services contracts (September 2017)
The need for early clarity on a Brexit transition (September 2017)
How Europe's capital markets interconnect
Our infographic,'How Europe's capital markets interconnect', shows the contribution the UK makes to Europe’s capital markets. You can download the AFME capital markets infographic, as well as the sources and data behind it.