The Association for Financial Markets in Europe (“AFME“) published a paper on September 6, 2017, which highlighted the necessity of transitional arrangements in the finance sector following Brexit.

AFME has made clear that it believes transitional arrangements need to be put in place prior to the United Kingdom’s exit from the European Union in order to avoid a number of risks relating to the recognition of central counterparties, cross-border contracts and data transfers, as well as a number of other potential issues.

The paper suggests that transitional measures, such as grandfathering cross-border trades and contracts executed prior to Brexit, regulators adopting a flexible and pragmatic approach to structures and operating models, and regulators and central banks taking steps to maintain a stable market, are essential in order to minimize disruption.

AFME also outlines a number of elements that the design of the transitional arrangements should contain.

The full paper is available here.