The FMLC responded to a call for written submissions by the Treasury Select Committee on transitional arrangements between the U.K. and E.U. in the event of Brexit. Upon Brexit, the U.K. will lose access to the European single market and will be considered a third country from the perspective of E.U. law. The FMLC noted that there remained substantial uncertainty as to the conditions that the U.K. and British regulators will have to satisfy in order to be able to secure access under a third country regime. The FMLC expressed the view that transitional arrangements would be a valuable method of promoting legal certainty and minimizing the disruption which could occur if there is a hiatus between U.K.-based market participants losing their “passports” to the E.U. single market and the application of Third Country regimes.
The FMLC also recommended that such arrangements be negotiated well in advance of the U.K.’s withdrawal from the E.U. and suggested a staged approach, whereby areas that are uncontroversial or offer mutual benefits are tabled for discussion first.