The United Kingdom has voted in a referendum by a narrow majority to leave the European Union (“Brexit”). The outcome of the referendum will have far-reaching consequences on financial markets and international capital raising. This Briefing sets out some initial thoughts on the potential impact of Brexit on issuers and distributors of financial securities in the context of the prospectus requirements applying to offers of financial securities in the UK and rest of the EU.

Effect of Brexit Vote -

The referendum result is advisory only and therefore has no automatic effect under UK or EU laws. For the time being, the UK remains a member of the EU and subject to the EU treaties. All existing EU-derived laws and regulation continue to apply in the UK. However, the UK government has stated that it intends to give effect to the result of the referendum. The UK will need to commence the process of its exit from the EU by serving a notice of its intention to leave the EU under Article 50 of the Lisbon Treaty (“Article 50 Notice”). Once the Article 50 Notice is served, the UK will have two years to negotiate and agree the terms of its exit. The terms would need to be approved by a qualified majority of the European Council (excluding the UK), and the consent of the European Parliament. If no agreement is reached within such two-year period, or any extended period agreed by all member states, the UK would automatically cease to be a member of the EU.