Luxembourg Hard Brexit Bill Of Law Deposited On 31 January 2019 To The Luxembourg Parliament

The Bill of law 7401 regarding the measures to be taken in relation to the Luxembourg financial sector in case of a hard Brexit was deposited on 31 January to the Luxembourg Parliament.

The departure of the United Kingdom from the European Union will have consequences for the British companies that are currently active in Luxembourg in the financial sectors using the European passport. In case of a messy withdrawal, these British companies may not be able to benefit from the system of the European passport and risk losing access to the Luxembourg market from one day to the other. Such a situation will make especially uncertain the fate of a number of contractual relationships that exist at the time of the withdrawal of the United Kingdom from the EU on basis of the European passport between companies of the British financial sector and Luxembourg counterparties and which produce effects far beyond this date. In order to avoid the risks which may arise from such a situation for financial stability, good functioning of financial markets, the Luxembourg financial sector actors as well as their customers, depositors, investors, policyholders and holders, it is important that the Luxembourg competent authorities have the necessary powers to ensure, as appropriate, the continuity of the above contracts after the withdrawal of the UK from the European Union for a specific period.

The Bill 7401 aims to confer to the Luxembourg competent supervisors (i.e. the CSSF and the CAA), the power to take temporary measures to remove the aforementioned risks and to ensure an orderly transition. The Bill 7401 modifies the text of the...