The date for Brexit is now just over a month away, on 29th March at 11pm GMT. Politicians however are still deliberating on whether the Withdrawal Agreement will be signed, or whether there will be a “no deal” Brexit (for example, see here on The Guardian news site). There have also been some announcements affecting energy and commodities since our last post here, in particular on the financial side:
Yesterday, regulators from the UK and the US announced measures to ensure that a “no deal” Brexit “will not create regulatory uncertainty regarding derivatives market activity between the UK and US”. An announcement can be found here on the FCA web site, with a report found here on the FT web site. The package includes extension of CFTC no action reliefs to the UK, as well as UK equivalence decision for the US. Last week, ESMA recognised three UK based Central Clearing Counterparties, ICE Clear, LCH and LME Clear, in the event of a “no deal” Brexit, as announced here.
These two measures ease some of the key fears of the derivatives markets relating to a “no deal” Brexit.
On the energy side, following the end of participation of the UK government in the ETS scheme, the UK parliament EU Energy and Environment Sub-Committee has met to discuss carbon pricing, as reported here on the Power Technology web site. Different options were discussed, including attempting to link to the ETS. It was also suggested that the current price of £16 per tonne of CO2 was unrealistic in the long term.
The coming weeks will see much news, as well as announcements. Market participants, whether based in the Uk or with UK based business, are likely to continue to prepare for a no deal Brexit.