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Vedder Thinking | News Sam Tyfield Comments on ESMA’s Post-Brexit Rules in Futures & Options World and Complinet

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The European Securities and Markets Authority (ESMA) recently provided clarification of post-Brexit obligations for cross-border derivatives contracts, but Partner Sam Tyfield believes the rules remain confusing to UK trading venues that are establishing venues in the EU and that this statement is a response to the U.S./UK derivatives accord.

Mr. Tyfield posed the question in Futures & Options World, “Is ESMA saying that the trading obligation will be waived in a no-deal even without an equivalence decision on UK trading venues or that ESMA expects all UK derivatives trading to have been transitioned to EU venues by March 29 so it’s not a problem?”

In Complinet, Mr. Tyfield noted that the statement on no-deal under MiFID/R is “absolutely a response to the U.S./UK derivatives accord. It took a long time and a lot of pain to reach an equivalence deal between the U.S. and the EU. A lot of trust must have been lost in the process.” He also noted “ESMA suggests that post-Brexit it’s not going to be a problem for EU27 counterparties to trade derivatives. It means that either they are turning a blind eye to the trading obligation or they expect everything to be in place for trading in the EU27.”

Mr. Tyfield concluded his commentary in Complinet, echoing his sentiment from Futures & Options World. “I left the ESMA statement more confused that I arrived at it…The political decision will be whatever hurts the UK the most regardless of the cognitive dissonance ESMA will be forced to endure to reconcile the simultaneous desires to steal business from the UK and ensure orderly and resilient markets.”

To Mr. Tyfield’s comments in Futures & Options World, please click here. (Subscription may be required.)

To read Mr. Tyfield's comments in Complinet, please click here.


Sam Tyfield