MiFID II and MiFIR will become effective in all EU Member States before the Brexit date. Following Brexit, UK based MIFID firms will no longer be able to make use of the licensing passport regime under MiFID. The UK will then have different options to either implement the existent and planned MiFID II / MiFIR rules one on one in the UK or implement an entirely new own regime. Departing from the EU regime would however limit the chances of being regarded as equivalent in terms of third country access rules under MiFID II / MiFIR.

The third country rules – newly implemented under MiFID II – allow domestic MiFID firms to register a branch within the EU with the EU national competent authority in the relevant Member State or centrally with ESMA (depending on the firms specific customer type). As these third country rules will not immediately come into force, so in any case there is considerable risk during the transitional period during which UK MiFID firms will no longer be regarded as MiFID firms under the directive nor will be able to be regarded as equivalent under the third country rules.

Besides, access to regulated markets, central counterparties (CCPs) and clearing systems in other Member States under the current und coming MiFID II / MiFIR regime will be closed to the UK, if the UK leaves the EU.