Forex brokers and hard Brexit. ESMA recalls the information obligation

Recently, there has been considerable confusion around BREXIT. Theresa May successfully raised doubts on the market about whether it will actually take place. As it will, there is no certainty for this moment. Meanwhile, the ESMA financial market regulator ESMA has published a reminder that it is necessary to inform clients about possible consequences in the event of a so-called hard BREXIT.

Transitional period? Nothing certain

The hard Brexit scenario means no introduction of the so-called transition period, thanks to which Great Britain would leave the European Union "gradually". If this happens, then on March 30, 2019, the United Kingdom will be outside the EU, which means that there are only 3 months left until the possibility of fulfillment. the darkest option.

Although a preliminary agreement between the EU and the UK has already been made some time ago, there are still a lot of doubts. Hence, to blow on the cold, ESMA has set a clear condition. Entities operating in the EU from the United Kingdom who provide investment services are required to inform their clients about possible effects that may affect their investment in the hard Brexit.

Brokers from the UK and Brexit

In order to avoid ambiguities, disruptions in the provision of services, investments and the emergence of any disputes, the above-mentioned entities are obliged to provide information such as:

• Brexit's impact on a given company and its operations as well as on customer relationships;
• Activities undertaken by the company, such as, for example, organizational arrangements for dealing with customer inquiries;
• Consequences for clients resulting from the restructuring of enterprises, in particular all significant changes in the terms of contracts;
• Contractual and statutory rights of clients in the above-mentioned circumstances, including the right to withdraw from the contract and all rights of recourse.

In addition, ESMA presented a statement explaining how the procedure of moving companies from the United Kingdom under the regulations of the European Union will take place in the case of Brexit hard scenario. In this situation, it was noted that British entities will be treated as companies with so-called third countries, for which a separate regulation is responsible.

However, due to the mutual relations between the EU and the UK, the Pan-European regulator does not hide the fact that it is in the interest of both parties to ensure quick verification and access to the market for British companies from the countries of the community. Therefore, ESMA has presented 4 with the conditions that should be met by financial entities so that such verification will be carried out as efficiently as possible.

The list of ESMA conditions is available in the official message on the regulator's website.