Impact of Brexit on share awards/schemes
Produced in partnership with Jeremy Edwards of Baker McKenzie and Gill Murdoch
Impact of Brexit on share awards/schemes

The following Share Incentives practice note Produced in partnership with Jeremy Edwards of Baker McKenzie and Gill Murdoch provides comprehensive and up to date legal information covering:

  • Impact of Brexit on share awards/schemes
  • Level of uncertainty
  • Prospectus requirements
  • Data privacy
  • Social security arrangements
  • EMI options and state aid
  • Passporting and financial institutions
  • Remuneration requirements
  • Market abuse and trading rules
  • Directors’ remuneration reporting

Level of uncertainty

Following the UK's departure from the EU on 31 January 2020 and the upcoming end of the transition period on 31 December 2020, thoughts are once again re-focussing on the impact that Brexit will have on various aspects of share schemes. The good news is that after the introduction of the employee share scheme exemption under the Regulation (EU) 2017/1129, Prospectus Regulation, the main barrier that companies offering share schemes would have faced, has been removed. However, there are a number of other areas of share schemes and their implementation that will or may be affected by Brexit.

Unfortunately, there still remains a high degree of uncertainty as to what Brexit will actually mean for employee share schemes. Much will depend on what is agreed (or not agreed) between the UK and the EU by the end of this year. Until then, there are issues to identify but not necessarily solutions for all of them.

Some of the remaining unanswered questions from a share schemes' perspective are:

  1. will data transfers between the UK and the EU require additional safeguards?

  2. will mobile employees be subject to double social security contributions on part or all of their equity income?

  3. will enterprise management incentives (EMI) require state aid approval and, if so, from whom?

  4. will financial institutions, such as administrators and brokers, be able to rely on

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