The underwriting and placement passport and Brexit

Abstract

The importance of the UK and London as a financial centre and the cross-border nature of underwriting services and the lack of national regulation means Brexit will be a difficult challenge for regulators and market participants, both within Europe and other third-country financial centres. Investment services (6) and (7) in the Markets in Financial Instruments Directive (MIFID) are a creation of the European single market. Outside of the passported context, these combined services are regulated separately or within more broad definitions. As combined services, they are not regulated on a cross-border basis within Europe. This paper summarises the history of the European passport for underwriting and placing services, the challenges in how it is regulated on a cross-border basis and offers ideas on how they can be addressed.