The Impact of Brexit On Non-European Hedge Funds
“Good morning everyone, the country has just taken part in a giant democratic exercise, perhaps the biggest in our history…The British people have voted to leave the European Union and their will must be respected,”
David Cameron, 24th June 2016
With the Brexit referendum decided and David Cameron’s resignation announced, we look at the key impact of the referendum decision on the non-European fund industry.
In the short term the markets and currencies will see significant movements. The Bank of England Governor, Mark Carney has already gone on record to assure investors and pledge billons of extra funds for the financial system as they seek calm the market volatility. What the duration and consequences of this volatility will be remains to be seen.
From an operational infrastructure perspective, there should be no immediate impact on the day to day operations of the funds industry. EU law specifies that a country wishing to leave the EU must invoke Article 50 under the Lisbon Treaty, which would lead to a two year transition period whereby the UK government, headed by a new Prime Minister would negotiate their exit terms. However, whether this timeframe is realistic is uncertain with many market participants suggesting that this timeframe is not reasonable. As previously highlighted on our pre referendum article, there are three principle exit models; the EEA model, the Swiss model, the World Trade Organisation model.
To read the full article, click on the pdf. below.
Laura O’Brien – Trinity
Tel: +353 1 279 9660