The following developments in relation to Brexit will be of interest to corporate practitioners in the event of a “no-deal” Brexit, i.e. if the UK leaves the European Union without a withdrawal agreement in place on 29 March 2019.

ESMA updated Q&A on the Prospectus Directive and Transparency Directive

ESMA has published updated versions of its Q&A on Prospectuses (ESMA31-62-780) and its Q&A on the Transparency Directive (ESMA31-67-127). There are three new Q&A which are intended to clarify the application of certain provisions of the Prospectus and Transparency Directives in the event of no-deal Brexit.

The new Q&As address the following:

  • EU home Member State choice (Prospectus Q&A 103 and Transparency Q&A 26) – ESMA says that EEA issuers and third country with securities admitted to trading on an EEA regulated market which currently have the UK as their home Member State for Prospectus  and Transparency Directive purposes should choose their new home Member State “as if for the first time, i.e. resetting their choice at the time of the UK’s withdrawal”. The Transparency Directive Q&A says that affected issuers must announce their change of home Member State within three months of 29 March 2019.
  • The use of prospectuses approved by the UK after a no-deal Brexit (Prospectus Q&A 104) – ESMA says that issuers will not be able to use UK-approved prospectuses in the EU27 after a no-deal Brexit. ESMA sets out its view on prospectus validity in different scenarios involving issuers seeking to make, or continuing with, a public offer after a no-deal Brexit and seeking or maintaining an admission to trading after a no-deal Brexit.


The FCA has announced that it has agreed with ESMA and other EU securities regulators memoranda of understanding (MOUs) that cover co-operation and exchange of information in the event of no deal Brexit:

  • one is a multilateral MoU with EU and EEA National Competent Authorities covering supervisory co-operation, enforcement and information exchange; and
  • the other is an MoU with ESMA covering supervision of credit rating agencies and trade repositories.

FCA’s use of temporary transitional power

The FCA has also set out how it would use its temporary transitional power in the event of a no-deal Brexit. The temporary transitional power would give the FCA the ability to delay or phase in changes to regulatory requirements made under the EU (Withdrawal) Act 2018 (the legislation that has enabled the ‘on-shoring’ of EU legislation and rules into the UK rulebook) for a maximum of 2 years from exit.

There will however be some areas where it will not grant this transitional relief. The areas are set out in the an Annex to the statement and include issuer rules (so EEA entities which have securities admitted to trading on UK markets will be required to submit information to the FCA and disclose certain information to the market from Exit day) as well as MiFID II transaction reporting and EMIR reporting obligations.

Consultation on draft guidance on CMA

The Government has published a consultation on draft guidance on the effects of a no-deal Brexit on the functions of the Competition and Markets Authority (CMA). The draft guidance covers the legal framework, merger control, enforcement of competition law (including anti-trust) and consumer protection law enforcement. The guidance also explains the treatment of ‘live’ cases in a no-deal scenario, which are those cases that are being reviewed by the European Commission or the CMA on Exit day.

Gavin Davies
Gavin Davies
Head of Global M&A Practice
+44 20 7466 2170
Mike Flockhart
Mike Flockhart
+44 20 7466 2507
Sarah Hawes
Sarah Hawes
Head of Corporate Knowledge, UK
+44 20 7466 2953
Antonia Kirkby
Antonia Kirkby
Professional Support Lawyer
+44 20 7466 2700