On January 22, 2018, the Association for Financial Markets in Europe (“AFME“) published a paper on cliff-edge risks in wholesale financial services resulting from Brexit. It defined a ‘cliff edge risk’ as one that is likely to cause severe disruption to markets and commercial activity on the day of Brexit if no regulations or legislation are in place.

The focus of AFME was on areas which are not easily resolved by businesses and therefore need intervention at policy level. It believes that the Withdrawal Agreement between the UK and EU is the best way to address the following risks:

• Personal data transfers across multiple countries;
• Continuity of cross-border contracts;
• Ability to choose jurisdiction and enforcement of judgements;
• UK Central Counterparties (CCPs) should be recognized under EMIR (Regulation 648/2012) and be allowed to continue servicing EU banks; and
• Recognition of resolution actions.