Yesterday, the European Securities and Markets Authority (ESMA) reminded MiFID firms of their obligations to disclose information to clients, and potential clients, in the context of Brexit.
ESMA's message is addressed to both UK firms that provide services into the EU27, and to firms in the EU27 that provide services to UK clients. It follows ESMA's analysis of the state of preparedness (or not) of firms which may be impacted by the UK withdrawal from the EU.
ESMA reminds firms to finalise and implement suitable plans in order to mitigate any risks stemming from Brexit in a suitable timeframe and prompts them to provide appropriate information to their clients. ESMA elaborates on what that information should include - for example, the specific implications of Brexit for particular clients, the actions the firm is taking, the consequences of any corporate restructuring and the contractual and statutory rights of clients, including the right to cancel the contract and rights of recourse, where applicable.
Despite the current uncertainty surrounding the divorce arrangements, ESMA's message is clear. Clients should be given as much information as possible in plain language and there should be arrangements in place to deal with their enquiries, such as the communication of contact details and the publication of FAQs.
ESMA tells firms to provide clients with information on the implications of Brexit