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15 February 2019

Regulators seal agreements to prevent financial market disruption under no-deal Brexit  

The European Securities and Markets Authority has agreed deals with UK regulators on cross-border co-operation and information-sharing to minimize disruption and safeguard the stability of the financial system should Britain leave the EU without a withdrawal agreement and transition period.

ESMA signed memorandums of understanding on February 4 with the Bank of England to recognize UK-based central counterparties and the central securities depository Euroclear UK and Ireland to ensure London-based clearing houses can continue to serve EU clients even under a no-deal Brexit.

Three days earlier ESMA agreed with the UK's Financial Conduct Authority on exchange of information for the supervision of credit rating agencies and trade repositories, while European national regulators concluded a separate multilateral deal with the FCA authorizing UK-based providers to carry out portfolio and risk management for funds domiciled in the European Economic Area.

These arrangements will come into effect only if the UK leaves the EU without a deal on March 29.