On 7 October 2019, the European Securities and Markets Authority (ESMA) published a statement providing an update on the UK’s withdrawal from the European Union and preparations for a possible no-deal Brexit scenario on 31 October 2019.

In the statement, ESMA confirms that the reference date in all of its previously published measures and actions, including public statements, issued regarding the possibility of a no-deal Brexit scenario, should be read as 31 October 2019. ESMA has included a full list of statements and measures issued in an annex to the statement.

ESMA has issued the following public statements:

  • Use of UK data in ESMA databases and performance of MiFID II calculations. This updates the ESMA statement issued on 5 February 2019 and informs stakeholders of ESMA’s approach to its IT applications and databases in the event of a no deal Brexit on 31 October 2019 and in particular focuses on the MiFID II / MiFIR publications performed by the various ESMA databases (Financial Instruments Reference Database (FIRDS), Financial Instruments Transparency System, double volume cap mechanism data as well as the annual ancillary activity calculations). As a general approach, in the event of a hard Brexit on 31 October, reference data submitted by UK trading venues and systematic internalisers to FIRDS will be terminated taking effect on 1 November 2019. To accommodate this change, ESMA will re-determine the Relevant Competent Authority (RCA) for all financial instruments that remain available for trading in the EU for which the FCA is currently the RCA to ensure that the RCA is within the EU;
  • Operational plans related to ESMA databases and IT systems. This statement compliments the statement referred to above and provides further details related to the operational use of ESMA’s IT systems during the period following a no-deal Brexit occurring on 31 October; and
  • Impact of no-deal Brexit on MiFID II/MiFIR and the Benchmark Regulation (BMR). This updates the ESMA statement of 7 March 2019 and covers the MiFID II “C(6) carve out”, ESMA opinions on third-country trading venues for the purpose of post-trade transparency, and the position limits regime and post-trade transparency for over-the-counter transactions. It also deals with the implementing technical standards on main indices and recognised exchanges under the Capital Requirements Regulation and the ESMA register of administrators and third country benchmarks under the BMR.

In terms of next steps, ESMA explains that it will adjust the approach for its IT applications and databases should the final timing and conditions of Brexit change and provide information as soon as possible.