One month ago, at 11:00 pm on New Year’s Eve, the Brexit implementation ended and the UK left the EU single market. The Trade and Cooperation Agreement between the UK and the EU that has applied since then does not deal with the regulatory detail of cross-border capital markets transactions. In our briefing we explain how market participants are navigating the different UK and EU regimes for debt capital markets. The key points are:

• Since the end of the Brexit implementation period, EU regulation impacting DCM and UK regulation impacting DCM are two parallel, but distinct regimes.
• The pan-European wholesale debt capital markets continues, despite Brexit. The impact of Brexit is felt in drafting and disclosure, rather than in market access or transaction structuring.
• The pan-European retail debt market continues to be a niche product, facing considerable regulatory obstacles. The absence of effective equivalence mechanisms is an additional obstacle.
• At present, the substantive content of issuers’ continuing obligations has not changed significantly. In the longer term, the potential for regulatory divergence between the UK’s and the EU’s market abuse and transparency regimes may be a factor in an issuer’s choice of trading venue.
• The pace and volume of regulatory change has not slowed down. The EU and the UK are now regulating separately, with a number of initiatives on each of their respective regulatory horizons. This makes the navigation of these regimes a more complex exercise, but if both the EU and the UK regulate in a proportionate manner, the pan-European wholesale debt capital markets need not be affected.