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European Parliament Adopts Resolution on Brexit Negotiations With UK

On April 5, the European Parliament (Parliament) announced that it has voted to adopt a resolution (Resolution) on negotiations with the United Kingdom, following its notification that it intends to withdraw from the European Union.

The Resolution sets out Parliament’s key principles and conditions for its approval of the United Kingdom’s withdrawal agreement. Any such agreement at the end of UK-EU negotiations will require the approval of the Parliament.

In the Resolution, as well as stating the importance of the protecting the rights of citizens during the negotiations, the need for negotiations to be made in good faith and that the United Kingdom negotiating trade agreements with third countries prior to its formal exit from the European Union would breach the EU Treaty, the Parliament makes several points relating to financial services, among other things. The Parliament:

  • warns that any bilateral arrangement in the areas of EU competence between one or several remaining member states and the United Kingdom, which has not been agreed by the EU member states acting together, relating to issues included in the scope of the withdrawal agreement or impinging on the future relationship of the European Union with the United Kingdom, would be in contradiction with the Treaties. This would especially be the case for any bilateral agreement or regulatory or supervisory practice that would relate to any privileged access to the internal market for UK-based financial institutions;
  • opposes any future agreement that contains piecemeal or sectoral provisions, including with respect to financial services, providing UK-based institutions with preferential access to the internal market or the customs union;
  • underlines that, after its withdrawal, the United Kingdom will fall under the third-country regime provided for in EU legislation; and
  • calls for an agreement to be reached as quickly as possible on the relocation of the European Banking Authority (currently located in London) and for the process of relocation to begin as soon as practicable.

More generally, the Parliament states that, should substantial progress be made towards a withdrawal agreement, talks could start on possible transitional arrangements for the UK’s future relationship with the European Union. However, such arrangements must not last longer than three years, and an agreement on a future relationship between the European Union and the United Kingdom as a third country can only be concluded once the United Kingdom has withdrawn from the European Union.

Upon being formalized, the resolution will be submitted to the European Council, the Council of the European Union, the European Commission, the European Central Bank, EU national parliaments and the UK government.

A provisional copy of the Resolution is available here.

©2017 Katten Muchin Rosenman LLP

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About this Author

David A. Brennand, Financial Services Lawyer, Katten Muchin Law Firm
Partner

David Brennand is a partner in the Financial Services practice in Katten Muchin Rosenman UK LLP. David provides advice to a wide range of clients active in asset management on a broad spectrum of matters pertinent to their operations, with a particular focus on advising asset managers on the structuring and ongoing operation of hedge and other alternative fund structures investing in a diverse range of asset classes.

As well as advising on fund structuring and their ongoing operation, David's expertise also extends to advising asset managers and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
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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 and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
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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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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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