March 18, 2019

March 18, 2019

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March 15, 2019

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Brexit Update: What You Need to Know About the UK Parliamentary Vote

The Brexit endgame has begun.

Next week, the UK Parliament is scheduled to vote on the agreement on the withdrawal of the United Kingdom from the European Union (Agreement) and its accompanying political declaration (Declaration).

UK Parliamentary Vote

The UK House of Commons has commenced debate on the Agreement and Declaration, with a vote expected to take place next Tuesday, 11 December 2018. Passage would conclude the UK's ratification process, which would then move to the European Parliament and Council for final approval. The Agreement—if ratified—would allow for a standstill transition period in the UK's existing relationship to the EU until the end of December 2020, with the potential for a short extension.

However, successful passage is not assured. The Agreement and Declaration have been the subject of intense, and often emotional, debate both between and within the major UK political parties. If the vote were to fail for any reason, it would halt the ratification process with potentially far-reaching consequences. Possibilities include: an attempt to renegotiate with the EU27; a vote of no-confidence in the government; the resignation of UK Prime Minister Theresa May; a general election; or the calling of a new referendum. The failure to reach any negotiated agreement with the EU27 could lead the UK to "crash out" of the EU after 29 March 2019 in a so-called "Hard Brexit". Although it is reported that the UK intends to introduce a temporary permissions regime (TPR) for EU27 entities currently conducting regulated activities in the UK through a passport, there are affirmative actions that EU27 firms will need to take to be able to ensure reliance upon the TPR.

The Withdrawal Documents

The Agreement and Declaration, while linked together, serve very different purposes. The Agreement is effectively "backward-looking" and intended to address severing the UK's current membership of the EU via a legally-binding treaty text. By contrast, the Political Declaration is "forward-looking" and is meant to sketch out, in a non-binding way, the ambitions of what the future relationship between an independent UK and the remaining 27 EU Member States (EU27) would look like. The text of the Withdrawal Documents is available on a dedicated UK Government website.

©2019 Katten Muchin Rosenman LLP

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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Christopher Collins Katten Law Firm London, UK
Associate

Christopher Collins advises clients across the financial services industry on regulatory and compliance matters and in relation to all types of financial instruments. He represents a wide variety of European and non-European clients including proprietary trading firms, investment managers, hedge funds, broker-dealers, trading venues and clearing houses.

Chris joined Katten Muchin Rosenman UK LLP as a trainee in 2016, subsequently qualifying as a solicitor. Prior to starting his training contract, Chris worked in the legal and compliance department of a global investment manager.

 

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

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Emma Khoo, Financial Lawyer Katten Law Firm London, UK
Associate

Emma Khoo represents clients across the wider financial services industry, focusing on regulatory and compliance work as well as transactional matters. She advises a wide variety of clients, including proprietary trading firms, hedge funds, broker-dealers, financial institutions, asset managers and general corporate clients. Emma regularly addresses Financial Conduct Authority (FCA) and European Union (EU) authorisation and compliance issues under EU directives, cross-border issues in the financial services sector, financial crime, regulatory capital requirements,...

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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