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Brexit will not be a salvation for British brokers

Brexit will not be a salvation for British brokers

created Paweł MosionekJuly 13 2018

The European Securities and Markets Authority (ESMA), the body responsible for regulating the financial market in the European Union, has published a communication addressed primarily to British financial institutions, including Forex / CFD brokers. The statement concerns a scenario in which the lack of a Brexit agreement will be realized, which would assume no transition period and the entry into force of the so-called "Hard Brexit" on March 30, 2019.

Brexit will not release brokers from ESMA

In order for companies registered in the United Kingdom to continue to provide services in the European Union after Brexit, it will be required to have full legal authorization based in one of the member countries (UE27). This also means that after Britain's exit from the EU, the British Forex broker will not be able to operate in the EU (including Poland) if it does not open a regulated branch in its territory. Thus, an escape from the EU does not imply the ability to provide services to European traders and offer them transaction conditions prior to the entry into force of the ESMA guidelines.

Time is running out

The validity of EU-UK passports under the MiFID will remain binding until December 2020, even if the agreement is not reached. However, it is extremely important to submit a request to the national authorities in time to transfer your activities from the United Kingdom to EU jurisdictions. Regulatory authorities in some countries have already emphasized that if they do not submit their application by the end of July, they do not guarantee that the authorization will be issued before 29 March 2019.

The official ESMA message

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About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.