Securities supervisors interfere in Brexit talks | Markets | 28.10.2020

The city on the Thames has blossomed into the EU’s financial hotspot over the years. Numerous banks, payment service providers and fintechs have their headquarters or at least strategically important anchor points in the British capital. Numerous blue chip stocks are listed on the London Stock Exchange. But when the United Kingdom leaves the EU, the financial center of London will also become part of a third country after the transition period ends at the end of the year. Which means: The market access of British financial service providers to the EU then depends on whether they classify the British financial market regulation as equivalent to their own, according to the “Frankfurter Allgemeine Zeitung” (FAZ).

Only when this so-called equivalence decision has been made can investors from the EU continue to buy and sell shares in London. So far, however, no decision is in sight. The reason for the delay is that there is still a lack of clarity about future British financial market regulation, reports the FAZ.

A message from Paris is therefore all the easier for investors: The EU securities supervisory authority Esma has now issued a transitional regulation for at least some of the double-listed companies, according to the FAZ. Esma said it was about minimizing market disruptions after the United Kingdom’s final withdrawal from the internal market.

Just a little consolation
However, the decision only applies to securities traded in pounds sterling – and thus to fewer than 50 shares. The trading volume of the papers is less than one percent of the EU share trade, reports the FAZ. The stocks would only be traded irregularly on the British stock exchange by European investors. There is still no solution for stocks that are double-listed in euros. According to its own statement, however, Esma has already done the “maximum possible”. (fp)

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Despite Brexit: British stocks offer the best opportunities for ten years | Markets | 28.10.2020

The Brexit negotiations have entered the hot phase, tensions are mounting – and British equities are nevertheless more attractive than they have been in a decade. At least that’s what Richard Colwell, division manager at Columbia Threadneedle, is convinced of. The stocks are about to rebound strongly, he predicts, sooner rather than later. “As a value asset class, they offer some of the best opportunities in distressed stocks in ten years,” argues the expert.

For almost 20 years, the UK stock market has been of little interest to investors. As a result, key figures such as the price / earnings and price / book value ratios are lower than ever since the 1970s compared to the global MSCI World share index. After the price plunge in the spring, British stocks did not recover as strongly as stocks from other investment regions, reports Colwell. “That’s partly due to hedge funds, which needed to counterbalance their heavy bets on US tech stocks by taking short positions somewhere,” he explains. It happened rather by chance that it hit British stocks. A vicious circle.

Broad sector mix including small caps
The Columbia Threadneedle specialist believes that the trend reversal could come from the private equity sector. “He has enough firepower in the UK and can take advantage of this value arbitrage.” The UK’s exit from the European Union should not delay or even prevent the comeback of British stocks, says Colwell. The market has already priced in a “hard Brexit”. This increases the chance for positive surprises.

With a view to individual industries, Colwell is now opting for a healthy mix. “We don’t want to leave out the sectors that have been affected,” he says. In addition to a broad mix of industries, investors should consider investing in small and medium-sized companies. Their shares could soon develop better than shares of large corporations due to the cycle. “The UK market may seem like the forgotten land. But the best time to invest can be when it feels most uncomfortable,” Colwell concluded. (fp)

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FDP calls for permanent commercial court in Germany

Set-justice

Vying for economic processes: The FDP wants to establish a permanent commercial court in Germany.


(Photo: dpa)

Berlin The European market for cross-border judicial services has been dominated by London in recent years. Legal experts assume that Great Britain will lose its dominant position as a place of jurisdiction for international trade and economic processes after Brexit.

The FDP sees a great opportunity for Germany here. German law enjoys high recognition worldwide. “As a judicial location for companies, Germany only plays a subordinate role in an international comparison,” said parliamentary group vice Stephan Thomae to the Handelsblatt. “Proceedings with high amounts in dispute fill the state coffers of others, and a further development of the law remains in place.” Brexit, for example, offers the opportunity to make the Federal Republic more attractive as a place of jurisdiction.

In a position paper, Thomae has drawn up an “Agenda for Germany as a legal location”. The most important point in this is the establishment of a separate international commercial court. According to Thomaes, “disputes arising from international commercial contracts with high amounts in dispute will be negotiated by professional judges and English will be used in full as the language of court and proceedings”.

According to the position paper, this dish can be located at popular international hubs such as Frankfurt am Main, Hamburg or Munich. Thomae considers the previous system of special chambers at regional courts, where professional judges judge together with voluntary commercial judges, to be out of date.

The Union is skeptical of the FDP initiative. “I am very much in favor of the internationalization of commercial jurisdiction in Germany,” said CDU legal politician Jan-Marco Luczak to the Handelsblatt. The possibility of negotiating economic processes in English “would massively strengthen Germany as a judicial location”. However, the creation of an international commercial court would be “a thick board for which many preliminary questions would have to be clarified”.

EU neighboring countries have already positioned themselves

Tilman Niedermaier from the corporate law firm CMS sees it similarly. It would be important, for example, whether, and in what language, decisions by such a court of justice are open to appeal. “If the language has to be changed from English to German within the other instances, the possibility of having the first instance in English becomes less attractive,” said Niedermaier.

The CDU politician Luczak also favors the introduction of chambers for international commercial matters at the regional courts. Some federal states such as Hesse and Hamburg have already set up English-speaking commercial courts specializing in commercial disputes. From November onwards, Baden-Württemberg will offer two places of jurisdiction for commercial proceedings.

The catch: although negotiations are in English, pleadings and judgments are still only available in German. The Courts Constitution Act would have to be amended for a completely English trial. The Federal Council has already made several attempts to do this. A draft law is still untreated in the Bundestag administration.

For experts, this is not understandable because neighboring EU countries such as France, the Netherlands or Belgium have already positioned themselves with newly established international trade courts. “In Germany, the topic has so far not found a comparably high priority,” said the federal manager of the German Association of Judges, Sven Rebehn.

“Because of the export strength of the medium-sized German economy, there is a high practical need to gear civil courts more closely to international trade disputes.”

Rebehn criticized the fact that the “model experiments” of individual regional courts with English-speaking civil chambers had not yet found a large number of visitors. His suggestion: “A concerted approach by the federal and state governments would be needed in order to bundle the competencies for international business processes at some locations in a meaningful way.”

More: Why the British Brexit games are negligent.

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The prospects for Brexit agreements have improved

Irish Minister for Public Expenditure and Reform Michael McGrath joined Foreign Secretary Simon Coveney’s optimism about a possible Brexit deal.

Important comments

“The prospects for a Brexit agreement are slightly better.”

“The European Union (EU) and the UK can reach an agreement on fisheries.”

In the last hour, Coveney said that now that talks are back on track, the two sides can reach a trade deal.

GBP / USD reaction

GBP / USD is not benefiting from renewed Brexit optimism and broad falls in the US dollar as it gives up intraday gains and trades flat around 1.3080.

Soaring coronavirus cases and a worse than expected UK Markit Preliminary Services PMI appear to have hurt the pound bull.

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Britain and Japan sign free trade agreements

Both states want to ensure continuity in trade and investment after London leaves the European Union. The agreement, which largely corresponds to Japan’s existing free trade agreement with the EU, must first be ratified by the parliaments of both countries.

Japan, the third largest economy in the world ahead of Germany, had negotiated with Great Britain, since Japan’s free trade agreement with the EU did not cover the UK after the end of the Brexit transition phase on December 31. Japanese companies welcome the agreement, but at the same time they are concerned about whether London will really get an agreement with the EU after the end of the transition phase.

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Boris Johnson’s risky moves against the EU in the Brexit final

Boris Johnson continues to be the tough negotiator. Last week he declared the Brexit negotiations over, now the U-turn has followed. Insight or tactic?

“Political theater” was what the CSU European MP Manfred Weber called Boris Johnson’s announcement to break off talks on the Brexit trade package. As a theater, you actually have to classify a lot of what is currently going on between the EU and London. With his strategy of maximum demands on the EU, the British Prime Minister poses as a strong man – but has to be careful that his threats do not come to nothing. But the EU will also have to make compromises.

Late last week Johnson declared the negotiations with the EU overif they do not fundamentally rethink their position. A Johnson spokesman became even clearer: “The trade talks are over. The EU has effectively ended them.” Should Brussels not move fundamentally, the team headed by chief negotiator Michel Barnier will not have to bother to come to London.

So much for the theater. In reality, of course, London and Brussels continued to negotiate, even if not initially at the highest level – they did so before Johnson officially announced yesterday, Wednesday, that he would return to the negotiating table. There is no alternative to a trade agreement for either side – regardless of whether it becomes something this year or later.

Australia and Canada are not role models

Johnson repeatedly speaks of a trade agreement with the EU based on the model of Canada or Australia. The former is currently completely unrealistic, the latter just a paraphrase for a no-deal Brexit. The CETA agreement with Canada is highly complex, the negotiations on it took almost six years and it is based on completely different political, economic and geographical conditions than an agreement with Great Britain. And Johnson actually doesn’t want a Canada agreement at all, because there is no duty-free movement of goods in this, which Johnson absolutely wants to negotiate with the EU.

The EU’s agreements with Australia are also unsuitable as a model for future relations between Europe and Great Britain. There is no free trade agreement between the EU and Australia. Both sides have only concluded framework agreements for trade, customs duties are also due here. So when Johnson speaks of a “contract based on the Australian model”, that is only a paraphrase for the situation after a no-deal Brexit, in which both sides largely exchange goods according to the guidelines of the World Trade Organization (WTO).

What hooks up a deal

There are currently three sticking points: On the one hand, there is access for EU fishermen to British waters – for European coastal states such as France this is just as emotional an issue as it is for Great Britain, which finally wants to determine its rich fishing grounds alone. The second central point is the so-called “level playing field”: In return for duty-free access to the internal market, the EU wants the same environmental, social and subsidy standards to protect against dumping. However, Great Britain no longer wants to let the Union talk itself into it and insists on its state sovereignty after leaving the EU. This also applies to point three, the so-called “governance”: The EU demands a reliable mediation instrument in the event that one side deviates from the treaty. So far she’s been biting granite in London. However, Johnson has agreed to abandon his demand for many individual contracts and to negotiate a single large contract – as requested by the EU.

When it comes to fishing rights, Britain only appears to have a trump card. The background to this is a dispute over catch quotas for more than 100 species and the question of whether these quotas should be negotiated annually or in longer periods of time. Without an agreement with the UK, EU fishermen would no longer have access to UK waters. But: Great Britain currently exports around 60 percent of the fish caught in British waters to the EU. Should tariffs be due on the catches, this market could also suffer considerably or even collapse.

How could it go on?

If the EU and Great Britain can return to trusting cooperation, there are around three weeks left to conclude a trade agreement. That is tight, but feasible, especially since both sides want to negotiate around the clock and also on the weekends. Barnier made it clear in a speech in the European Parliament on Wednesday: “I think an agreement is within reach if we on both sides are willing to work constructively and in a spirit of compromise. Our door will remain open until the last day, until the last Day on which it still works. “

A sign from a pro-Brexit protester reading “No Deal Let’s Go WTO” in London: Should there actually be a Brexit without a trade agreement, mutual tariffs would also be due with the WTO rules. (Source: Kirsty Wigglesworth / dpa)

If both sides insist on their maximum demands, there will actually be a Brexit without the future relations between the EU and Great Britain being clarified. Then the rules of the WTO take effect, but they mean high tariffs for both sides.

The EU should also consider an emergency option in the event of a hard Brexit. The commercial contract therefore does not necessarily have to be signed and sealed by the end of the year – if necessary, after a brief, unregulated phase, a contract would come into force with a delay in early January. “It is now being discussed that in the event that an agreement does not succeed by around 10 November, one can accept chaos at the beginning of the year for a few weeks at the beginning of the year and simply continue to negotiate,” said a high-ranking EU member familiar with the talks. Diplomat.

Less theater, more realism

From the British side, however, it was heard that they would not get involved. After a hard Brexit, the WTO rules would first have to be introduced. British diplomatic circles said it was almost impossible that Johnson would negotiate a different solution with the EU during this phase.

There are three decisive and exciting weeks ahead of us, in which it will definitely be decided how the EU and Great Britain will deal with each other from 2021 onwards. For this time one can only wish: Less theater, more realism – on both sides.

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British government resumes negotiations with EU

Boris Johnson

The British Prime Minister put the talks on hold.

(Photo: AFP)

London The three-day compulsory break is over, the final phase of the free trade talks between Great Britain and the EU has begun. Chief negotiators Michel Barnier and David Frost will meet again in person for the first time on Thursday in London. Both teams will negotiate daily from now on, including the weekends. An agreement is now targeted for mid-November.

British Prime Minister Boris Johnson had put the negotiations on hold after the EU summit last week because the EU heads of government had demanded further concessions from London in their summit declaration without signaling any concessions themselves.

Although Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte had publicly stressed their willingness to compromise, Johnson preferred to escalate the situation. The EU must “fundamentally” change its approach before one can continue talking, he demanded.

In three telephone calls, Barnier had to change his British colleague Frost’s mind. The EU chief negotiator promised to intensify the talks and to start working on the text of the treaty. In doing so, he was fulfilling an old British requirement.

The Frenchman also publicly announced in the European Parliament on Wednesday that the EU respects British sovereignty and that both sides must make compromises. That was enough to satisfy the British.

Barnier and Frost have now agreed on ten procedural rules for the final phase. The draft contracts of both sides should be used as a basis “until a common approach is found,” says the document. A joint secretariat will oversee this process.

Brexit-Briefing: The newsletter on Great Britain’s departure from the EU – informs you every Tuesday about the consequences of Brexit for the economy. Register here now.

From a Brussels point of view, the fastest way would be to take the EU draft and introduce British amendments. However, Frost did not want to get involved.

The remaining contentious issues include fisheries, the rules for fair competition and the arbitration mechanism, with which disputes between the partners are to be settled in the future. But the future cooperation in the energy market still has to be clarified, as well as some details regarding the trading of goods and services.

The British government had already accommodated the EU on a number of points. Frost had shown himself to be open to an effective subsidy control regime. The Europeans, on the other hand, suggest flexibility in the fisheries issue.

Neither side want to give the all-clear yet. “It is entirely possible that the negotiations will not be successful,” said a Downing Street spokeswoman.

But Johnson needs a deal for several reasons. On the one hand, it has to minimize the economic damage caused by Brexit in the middle of the Corona recession. On the other hand, he wants to avoid the Scottish nationalists getting an absolute majority in the regional elections in May and then calling an independence referendum.

More: British national debt rises to record high in corona crisis.

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EU emergency plan should prevent a hard Brexit in the event of an exit without an agreement

The national flag of the United Kingdom of Great Britain in front of Big Ben

According to previous expectations, a hard break with the EU threatens if no contract is concluded in the next two to three weeks.


(Photo: dpa)

Berlin In poker about a new trade agreement between the European Union (EU) and Great Britain, according to a media report, a trade agreement could still be reached in the event of a hard Brexit. An emergency variant is currently being examined at EU level.

The commercial contract therefore does not necessarily have to be signed and sealed by the end of the year. If necessary, after a brief, unregulated phase, a contract would come into force with a delay in early January. This is what the newspapers of the “Funke Mediengruppe” report citing EU council circles on Wednesday.

Brexit-Briefing: The newsletter on Great Britain’s departure from the EU – informs you every Tuesday about the consequences of Brexit for the economy. Register here now.

“It is now being discussed that in the event that an agreement does not succeed by around 10 November, one can accept chaos at the beginning of the year for a few weeks at the beginning of the year and simply continue to negotiate,” said a high-ranking EU familiar with the talks -Diplomat. This is not a desirable solution because something like a hard Brexit would be allowed for a certain period of time.

Prime Minister Boris Johnson, on the other hand, believes that a return to the negotiating table after a hard Brexit is out of the question. “We have repeatedly made it clear that an agreement must be made before the end of the transition period and we will not negotiate any further next year,” said a Johnson spokesman. The government had to give security to British citizens and businesses, and “endless negotiations” would not do that.

According to previous expectations, a hard break with the EU threatens if no contract is concluded in the next two to three weeks. Then ratification by the parliaments in Brussels and London and the technical implementation will no longer succeed in time for the current Brexit transition phase to expire at the end of the year.

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Comment: Boris Johnson is in the struggle for Brexit not to be trusted

Emotions and political drama have long since taken control. Great Britain cannot use any further turbulence in this regard.

It is nothing new that the British Brexit elite consider their country to be so extraordinary that they are convinced they need no one, especially not Europe. But one might think that the EU exit process, which has been going on for years, is tedious and filled with drama, is the fairy tale of Great Britain Would have exposed uniqueness as such. But this is by no means the case. Prime Minister shoots again and again Boris Johnson from Downing Street verbally towards Brussels – and not only puts all the blame for the failure of the talks on a future free trade agreement on the ME, but also threatens to break off the negotiations if the international community does not agree Londons move. For days, conservative ministers have been more or less bluntly accusing Brussels of not wanting to grant Great Britain the deal the kingdom deserves.

The EU has a clear advantage in the negotiations with Great Britain

This can be described as the pure form of the English “exceptionalism”, an eternally lasting exceptional position. Nonetheless, the government’s approach is remarkable because even the last ideologically disguised hardliner on the island should have noticed that the 27 EU member states enjoy an advantage at the negotiating table due to their size, strength and experience. The problem is that it is no longer just about content-related issues. The partners could of course agree to compromises on both sides on fisheries or on state aid. But now emotions have become too big a role. And that’s where it gets dangerous.

Feelings make people act unpredictably, which is why Johnson and his Eurosceptic applauseers must be trusted to take every step. Economic issues are less important to them than the much-invoked buzzwords freedom, independence and sovereignty.

Brexit: The UK economy is calling for help

Unfortunately, this attitude in no way coincides with the calls for help from the business world. Entrepreneurs expect chaos and delays at the borders, business people look in horror at the bureaucratic effort they will face, at the impending tariffs and controls that, among other things, make importing and exporting products in both directions more expensive, as well as truck traffic jams that are kilometers long in the ports the British Isles. Not to mention the former civil war area of ​​Northern Ireland, where people are afraid that conflicts would flare up if there was a visible border with the EU state Ireland.

In the kingdom, observers are puzzling how serious Johnson is about the hard break. Are these political shop window speeches with which he wants to show his strength in front of his compatriots by rumbling loudly towards Brussels and presenting himself as the savior of a deal in a few weeks? Or would he risk that the rules of the World Trade Organization take effect when the transition period expires?

The EU and the British will remain partners after Brexit

Actually, the country that has already been hit by the pandemic cannot afford any further impairments in addition to the second wave of coronavirus, even if there will be – whether an agreement is in place or not. In any case, the political and economic relationship between the continent and the Kingdom will be fundamentally different from 2021 onwards. The advantage of a contract, however, is that not all china would be smashed, not all trust would be destroyed. In the end, unfortunately, this is too often forgotten, Great Britain and the rest of the EU remain neighbors as well as close allies and trading partners.

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EU emergency plan should prevent a hard Brexit in the event of an exit without an agreement

The national flag of the United Kingdom of Great Britain in front of Big Ben.

The EU wants to secure the possibility of a trade agreement with Great Britain with an emergency plan even in the event of a hard Brexit.


(Photo: dpa)

Berlin In poker about a new trade agreement between the European Union (EU) and Great Britain, according to a media report, a trade agreement could still be reached in the event of a hard Brexit. An emergency variant is currently being examined at EU level: The commercial contract therefore does not necessarily have to be signed and sealed by the end of the year – if necessary, after a brief, unregulated phase, a contract would come into force with a delay at the beginning of January.

This was reported by the newspapers of the “Funke Mediengruppe” with reference to EU council circles on Wednesday. “It is now being discussed that in the event that an agreement does not succeed by around 10 November, one can accept chaos at the beginning of the year for a few weeks at the beginning of the year and simply continue to negotiate,” said a high-ranking EU familiar with the talks -Diplomat. This is not a desirable solution because something like a hard Brexit would be allowed for a certain period of time.

Prime Minister Boris Johnson, on the other hand, believes that a return to the negotiating table after a hard Brexit is out of the question. “We have repeatedly made it clear that an agreement must be made before the end of the transition period and we will not negotiate any further next year,” said a Johnson spokesman. The government had to give security to British citizens and businesses, and “endless negotiations” would not do that.

According to previous expectations, a hard break with the EU threatens if no contract is concluded in the next two to three weeks. Then ratification by the parliaments in Brussels and London and the technical implementation will no longer succeed in time for the current Brexit transition phase to expire at the end of the year.

More: The British prime minister remains tough in the conflict over a trade deal: the talks are over as the EU is not ready to change its position.

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