As a no-deal Brexit (i.e. the UK leaving the European Union without a withdrawal agreement in place) remains a possible outcome, below is a summary of the legislative and regulatory changes that will apply in the event of a no-deal Brexit that will be of interest to listed companies and corporate law practitioners.

Further detail can be found in the corporate law, capital markets and contract and other obligations sections of our Brexit legal guide, which have been updated to reflect the latest developments and which cover the anticipated impact of Brexit depending on whether there is a “no-deal” Brexit or a negotiated withdrawal deal is reached.

Legislative changes

The Government has published legislation to deal with a range of corporate law matters in a no-deal Brexit scenario including:

No-deal technical notes

The Government has also published a number of technical notes which provide guidance, in the context of a ‘no-deal’ Brexit, on actions for businesses and on the UK Government’s plans to afford assistance to affected businesses and individuals. Topics covered include structuring a business, accounting, audit and enforcement of judgments. There is also a tool for businesses, Find out how to prepare your business for Brexit, which takes companies to relevant guidance via a series of questions.

FCA Handbook changes

The FCA has confirmed the final rule changes to its Handbook that will apply in the event of no-deal. The impact of the changes for UK incorporated companies which have securities admitted only to a UK regulated market will be minimal. Issuers which have shares admitted to a regulated market in the UK and in another EEA state will have to adjust their systems and controls and, for example, make additional notifications to regulators for certain matters, including in relation to PDMR transactions.

Takeover Code changes

The Takeover Panel has set out, in its response statement RS 2018/2, the changes required to be made to the Takeover Code as a result of Brexit. The changes will take effect when the UK ceases to be an EU Member State or, if a withdrawal agreement is reached, at the end of any transition period.

The changes will not have a significant impact on transactions. In particular, the Panel is not changing its treatment of conditions relating to the EU Merger Regulation to align it with its treatment of other merger control regimes around the world. The key changes are:

  • Removal of the shared jurisdiction regime – Following Brexit, the shared jurisdiction regime will cease to apply to UK incorporated companies. As a result, the Takeover Code will apply in full to an offer for a UK incorporated company that has its securities listed on an EEA market, provided the company has its place of central management and control in the UK; and the Panel will no longer have any jurisdiction over offers for EEA-incorporated companies which have their securities admitted to trading on a UK market.
  • Sending documents to shareholders in the EEA – The Note on Rule 30.4 currently says that the Panel will not normally grant a dispensation from the requirement to send offer documentation to shareholders or employee representatives in the EEA. This Note will be amended to refer only to the UK, Channel Islands or Isle of Man. However, the Panel says that it is unlikely to grant a dispensation for EEA shareholders in the short term post-Brexit, assuming there is no immediate change in the current convergence of laws.
Sarah Hawes
Sarah Hawes
Head of Corporate Knowledge, UK
+44 20 7466 2953
Antonia Kirkby
Antonia Kirkby
Professional Support Lawyer
+44 20 7466 2700
Robert Moore
Robert Moore
Partner
+44 20 7466 2918
Stephen Wilkinson
Stephen Wilkinson
Executive Partner, Client and Markets
+44 20 7466 2038