ESMA has published a statement reminding firms of their obligations under MiFID to disclose information to clients in the context of Brexit. The statement is addressed to UK firms that provide services to the EU27 countries (whether directly or through a branch) and to EU27 firms that interact with clients based in the UK (whether directly or through of a branch). In its statement, ESMA:
- reminds firms of their obligation to provide information to clients on: (1) the implications of Brexit on existing and new contracts; and (2) the impact of Brexit-related measures that a firm has taken or planned;
- indicates that the client information should at least address:
- the impact of Brexit;
- information on the actions that are being taken to properly inform clients and prevent any detriment to them;
- the implications of any corporate restructuring, including any relevant changes to contractual terms arising from corporate restructuring; and
- contractual and statutory rights, including the right to cancel the contract and any right of recourse. In particular, firms should highlight any changes to clients' contractual relationship with the firm and any impact on specific contracts that may occur as a result of the firm's actions;
- highlights that any communication to clients should be clear and in plain language and should attempt not to cause undue concern. Within these communications, clients should be informed of who they can contact for further information; and
- reminds firms to finalise and implement suitable plans in order to mitigate any risks stemming from the UK withdrawal in a suitable timeframe.
