Draft Bill Of Law N°7401

On 31 January 2019, a draft bill of law n°7401 (the “Bill”) was issued on measures to be taken in relation to the financial sector in case of the withdrawal of the United Kingdom (“UK”) and North Ireland from the European Union (“EU”) (“Brexit”).

Said Bill relates to the scenario where, on 29 March 2019, no withdrawal agreement has been entered into between the UK and the EU (“No-deal Brexit”). In a No-deal Brexit scenario, actors of both the UK financial sector and the UK investment funds sector would no longer be able to rely on the European passport to provide their services to EU clients, neither on a cross-border basis nor by way of the establishment of a branch (or appointment of agents). According to the Bill, this situation could lead to financial instability and market turmoil. Along with other European Member States, the Luxembourg government has adopted the Bill to mitigate these risks.