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Brexit – The story continues

The activity around Brexit continues, with several important events taking place since our last post here. In particular, last week, the UK Government released their white paper on the proposed position with which to negotiate the withdrawal with the EU, which can be found here. This follows the previously published draft Withdrawal Agreement (see here).  The white paper is the UK Government’s negotiating position, rather than an agreed policy. The issues can be broadly divided into “financial services” and “energy”.

Financial services
Page 28 sees the proposal for the arrangements on financial services after Brexit. The proposal has raised some controversy with a move away from proposed “recognition” to a proposal for a modified form of “equivalence”. Some reactions can be found here on the Financial News web site.

In the meantime, ESMA has issued this statement, which advises authorised UK firms that wish to gain authorisation from an “EU27” National Competent Authority (NCA) in time for the 29th March 2018, to submit applications within a few weeks. Such application may be necessary for firms who wish to continue to provide Investment Services within the EU after the Brexit date, in the event of no agreement.

Depending  on the outcome, rules such as EMIR and MiFID II could change in application, in different ways, depending on whether the entity is based in the UK, EU27 or outside.

Page 44 of the white paper proposes the future position from an energy perspective. There are several points of note:

  • There is a commitment to keep the SEM/ISEM market on the island of Ireland, which is also mentioned in the draft Withdrawal Agreement.
  • A preference is stated to remain within the Internal Energy Market. However there is also a proposal on what could be put in place failing that, with coupling and a common rule book.
  • There is a wish to stay involved in ENTSO-E and ENTSO- G.
  • There is a commitment that REMIT will stay broadly the same.

Shortly before the publication of the white paper, Lawrence Slade, chief executive of Energy UK published this post setting out the desired position from an Energy UK perspective.

Uncertainty remains
The subsequent political fallout after publication means that although more positions have been expressed, there is still a lack of certainty about the post Brexit model. This means that UK based companies, and others that trade with the UK or have UK based positions, will need to make scenarios based plans.

Anyone wishing to discuss these issues is welcome to contact ETR Advisory at

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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