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Brexit – Withdrawal Agreement and Commission hard Brexit plan

It has been a busy few days on the Brexit front, with a great deal of activity since our last post here.

Withdrawal Agreement
The political side of the Brexit discussions has been very busy, with news of a Withdrawal Agreement from both the UK Cabinet and the EU (see for example here on the Sky News web site). The Withdrawal Agreement itself can be found here and runs to over 500 pages. In principle the document  “keeps” the UK under EU law for a transitional phase, which by default finishes at the end of 2020, after which a new deal will come into effect (this is driven to some degree by the “Irish backstop”). The document contains several references to the Irish “ISEM” Single Electricity Market:

  • On page 317 – Article 11 of the Northern Ireland protocol.
  • On page 456 Annex 7 – detailing that all current EU legislation will apply in Northern Ireland (and the UK) during the transitional phase.

On Page 358 there is a general reference to the ETS.

There are also explanatory notes to be found here.

European  Commission “Hard Brexit” plan
On Tuesday, the European Commission issued this document, a “Contingency Action Plan” for a “hard Brexit” from an EU perspective. Page 7 of the document contains a section on Financial Services, including a commitment to provide appropriate equivalences to prevent some “cliff edge” effects of a hard Brexit. While not explicitly stated, these increase the likelihood of equivalence decisions on Regulated Markets, which may reduce the risk of negative effects to Non Financial Counterparties under EMIR.

Annexes to the document can be found here, with the set of “preparedness notice” documents from the Commission here.

It is highly likely that there will be more Brexit news in the coming days.

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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