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

Impact of Brexit on share awards/schemes

Level of uncertainty

Following the UK's departure from the EU on 31 January 2020 and the last minute trade deal agreed with the EU, companies and administrators are assessing 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.

Notwithstanding the trade deal, there remains uncertainty around financial services, which may impact administrators and other advisors. Certain areas require further action, such as tracking mobile employees and ensuring that social security is paid in the right place.

Prospectus requirements

One of the main barriers for companies seeking to offer share plans in a particular country is if a prospectus is required under the securities laws of that country. Issuing a prospectus can be a costly and time-consuming process and only usually viable if the company has sufficient employees in that country.

Until 2019, the share scheme exemption under the Directive 2003/71/EC, Prospectus Directive only applied to those companies that were headquartered in the EEA or were listed on an EEA regulated market. However from 21

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