In Short
The Situation: In the event of a "hard
Brexit," establishing a new contractual framework with
EU-based clients will be a protracted and costly task for
investment service providers based in London.
The Result: The French government's
Ordinance of February 6, 2019, creates a "safe harbor"
regime designed to facilitate replications of existing netting
agreements by investment service providers by way of notification
to their EU-based counterparties.
Looking Ahead: Replications, together with
novations, transfers, or Part VII schemes, require attention from
both sell- and buy-side market participants. Many have decided to
replicate existing agreements with French counterparties under
French law master agreements.
