Uncertain Seas: European Financial & Regulatory Developments Into 2017

1. Brexit

On 23 June 2016, the UK voted in referendum to leave the EU. This outcome was generally a surprise to the financial markets and gave rise to immediate market volatility, particularly in relation to the pound, which fell heavily in value against the euro and dollar. The vote, however, has no immediate effect. The UK currently remains a member of the EU, and existing EU-derived laws and regulations continue to apply to the UK. To commence its exit from the EU, the UK government has to serve notice of its intention to leave under Article 50 of the EU Treaty. The UK then has two years to negotiate the terms of its exit with the EU. If no agreement is reached, then at the end of this period (assuming no extension is agreed), the UK will automatically leave the UK and its trading relationship with the EU will default to World Trade Organisation ("WTO") rules. The UK Prime Minister, Theresa May, has indicated her intention that the Article 50 notice be served by