The French government regulation of 6 February on measures to prepare for Brexit in relation to financial products mitigated the consequences of a no-deal withdrawal on the eligibility of British securities for the PEA.

Securities eligible for the PEA are those issued by companies registered in an EU (or EEA) memberstate as well as units of collective investment funds with at least 75 percent of their assets investedin securities of EU (or EEA) companies.

Brexit will therefore result in the exclusion of UK securities and UK collective investment funds fromthe PEA.

This will also have an impact on other collective investment funds that hold UK assets for a total ofthe 75 percent ratio.

The French government regulation no. 2019-75 of 6 February 2019 therefore provides a temporary extension for the eligibility of the PEA for British securities and units in collective investment funds acquired before the Brexit date. The ministerial order of 22 March 2019 further specifies the duration of this extension:

• Securities of UK issuers subscribed or acquired before the date of a no deal Brexit will remain eligible for a 15-month period
• Units or shares of UK collective investment funds subscribed or acquired before the date of a no deal Brexit will remain eligible for a 15-month period
• Collective investment fund units will remain eligible for a period extended to 21 months, provided that their management company agrees to comply with the investment ratio in EU non-UK companies (75% of the assets) and thus remianing eligible for the PEA at the end of this period. If not, the eligibility period remains at 15 months

Management companies of collective investment funds must inform the account holder, within 3 months of the date of a no deal Brexit, of their intention to remain eligible or not for the PEA.

The account holder must also inform the PEA owner within 4 months in the event the securities are no longer eligible.

Our team would recommend defining a post Brexit strategy, and eventually taking advantage of these measures to adjust their investment planning in order to maintain the eligibility of their funds for the PEA.

Contacts Deloitte Luxembourg

Contacts Taj France