Brexit and financial services: How will the markets cope?

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The UK’s withdrawal from the EU is likely to have significant market, political, and policy consequences for the UK financial system, for the single market and the euro area, and for the international financial system.Given that after Brexit the UK will become a third country, a real challenge that needs to be tackled is how different directives/regulations (e.g. EMIR, MiFIR, MiFID I, MiFID II, MAR, Solvency II) will be applied and implemented. For asset managers and investment funds, an area of concern is the distribution of financial products, in particular those that are managed in the UK and distributed in the Union.Regarding derivatives, there should be continuity of contracts. Parties should be able to continue to respect their contractual obligations – including payments, settlements and collateral transfers – as before, irrespective of the form of the UK’s withdrawal from the EU.