On 23 November 2018, there was published a communication (dated 13 November 2018) from the European Commission entitled Preparing for the withdrawal of the UK from the EU on 30 March 2019: a Contingency Action Plan. The communication focuses on a no-deal scenario and identifies key areas and actions to be taken, as well as a structure for discussions and Member State coordination between November 2018 and 29 March 2019. Annex 1 of the communication contains eight legislative preparedness proposals for measures that must be adopted irrespective of whether the UK’s withdrawal is orderly or otherwise.

The communication also provides that in the Commission’s view, contingency measures adopted at all levels should comply with the following general principles:

  • Contingency measures should not replicate the benefits of membership of the Union, nor the terms of any transition period, as provided for in the draft Withdrawal Agreement;
  • Contingency measures will in general be temporary in nature, and should in principle not go beyond the end of 2019;
  • Contingency measures will be adopted unilaterally by the European Union in pursuit of its interests and can therefore, in principle, be revoked by the European Union at any time;
  • Contingency measures must be adopted respecting the division of competences provided for by the Treaties as well as the principle of subsidiarity within the European Union;
  • National contingency measures must be compatible with EU law, including the international obligations of the Union; and
  • Contingency measures will not remedy delays that could have been avoided by preparedness measures and timely action by the relevant stakeholders.

Financial services is specifically discussed on page 7 of the communication. Such discussion covers, among other things, not-cleared over-the-counter derivative contracts and cleared derivatives.