1. Risk of increased costs for prospectus approval - At present, the UK is subject to the EU regulatory regime which allows the passporting of prospectuses between EU Member States. Post-Brexit the UK may no longer be able to avail of this regime, meaning that companies wishing to list in the UK would have to obtain a separate approval from the UK regulator. UK companies seeking to list in EU Member States may be required to obtain approval from the competent authority in each EU Member State in which they intend to list. This would significantly increase the administrative burden and costs associated with prospectus approval and would potentially delay the raising of capital.
  2. Risk of postponed or abandoned transactions - Volatility in financial markets following a Brexit vote and uncertainty as to the post-Brexit landscape may lead to parties avoiding entering into transactions in the aftermath of the UK's vote to leave the EU.
  3. Risk of lack of access for Irish corporates to capital from the UK - Irish corporates often enter into capital market transactions with UK based investment banks and other investors in order to obtain finance. Their ability to enter into such transactions may be impacted by Brexit and it could become harder to access these alternative sources of finance to bank lending.
  4. Risk of overall lack of confidence to enter into new transactions - We would expect the Brexit vote to have a dampening effect on capital markets activity, impacting on the confidence of parties to enter transactions and generally resulting in a reduction in business activity, in the short term at least.
  5. Risk of impact on Capital Markets Union - The most significant EU regulatory project currently underway is Capital Markets Union, which promotes diversification of funding sources for the EU economy and a reduction in dependence on traditional bank lending. These efforts could be undermined by Brexit, given that the UK is an important advocate of reforms of the EU's capital markets. In particular, the UK position often aligns with the Irish position on these matters and Brexit would see the loss of an influential ally for Ireland at the EU negotiating table.