BREXIT - An attempt to make sense of the options available and dispel some of the misinformation being distributed. For further information please contact iainbf@eyestormconsulting.com or in the UK on 07415 529777 , HK +852 6393 9173

1. “Brexit”
A risk with real opportunity or a leap of faith
into the abyss?
Eyestorm Consulting!

2. The United Kingdom Leaving the EU (“Brexit”) - Overview and Timeline
June 23 2016
UK referendum
completed
10 Feb. 2016
MiFID II delay
confirmed
31 Dec 2016
PRIIPS Deadline
Dec 2016/Jan 2017
Probable date for Ar?cle
50 invoca?on
Jan 2018
Benchmarks Regula?on
expected
insert
• The United Kingdom decided clearly in the referendum to leave the European Union. The result is not in doubt.
• The Prime Minister resigned and all of the candidates to become Leader of the Conserva?ve Party have ruled out any further plebiscite.
• Vola?lity associated with the “surprising result” has already calmed to normal levels. Markets remain fragile to further shocks however.
• Both major poli?cal par?es in the UK have found themselves to be on the wrong side of the argument as far as the vote is concerned and there is the
poten?al for the opposi?on to split. General Elec?ons in both France and Germany over the coming 18 months will have an effect on nego?a?on.
• Trade rela?onships and the nego?a?on of con?nuing terms for UK access to the single market seen as a priority in the UK.
• Ar?cle 50 (the mechanism for formal withdrawal) has to be invoked but only by the UK Government. The belief that this will be enforced upon the
United Kingdom by the European Union’s Commission (EC) is wholly without status . The UK Government does not have to act swily in this ma]er.
• Several other countries now have significant sized poli?cal par?es calling for similar votes. The longer the ?meframe for UK withdrawal, the more
likely the “contagion” spreads, hence the desire amongst the EC to move the process along as quickly as possible.
• There is no reason to believe that the UK will change posi?on on freedom of movement. Any FTA will have to take this into account.
• It is highly unlikely that any regula?on expected to be delivered over the coming years (MIFID/MIFIR. SMR. BSBG. PRIIPS. ) will not be delivered exactly
as is now , within the ?meframes expected. The UK will be unlikely to withdraw more swily than the 2 year nego?a?on period and as such all
deadlines will s?ll need to be met. The FCA, HM Treasury and Bank of England have been driving the regula?on. This is likely to be adopted as is.
• In our opinion, divergence of rules and regula?on will take many years to become no?ceable to most opera?ng businesses and the clear inten?on
amongst the UK’s regulators and poli?cians will mean they con?nue to work supra-na?onally on regula?on and global financial stability.
Overview
As a consequence
September 9 2016
New leader elected by
ConservaUve Party (New PM)
I3 Jan 2018
MiFID II Deadline
Whole of 2017
Withdrawal from EU
Nego?a?on begins
Whole of 2018
Withdrawal from EU Nego?a?on
Likely Con?nues
2019 Banking Reform Deadline
2
Apr-May 2017
French PresidenUal
ElecUon
A date between
Aug-Oct 2017
German Federal
Elec?on
Dec 2018/Jan 2019
UK leaves EU

3. “Brexit” Key Themes – A “Merry-Go-Round”
Single
Market
Sovereignty
Global
Trade
Freedom
Of
Movement
• Not just EU members that have
access to single market
• Access and membership is
mistakenly conflated
• Wild values on both sides have
confused issue
• Both UK and EU na?ons would
prefer tariff free trade but EC
has poten?al to make divorce
difficult
• Na?onal Governments of EU
member states likely to be
lobbied heavily to keep UK as
close to single market as
possible
• Immigra?on to the UK s?ll
being reported by media as the
key determinate of win for
LEAVE campaign
• Pressure on Public Services and
Housing seen as the mo?vator
for the above belief
• Non EU migra?on sidelined in
debate
• Opposi?on and Government
both considered weak on this
issue by an electorate that is
unlikely to tolerate any
backtracking
• UK may need to nego?ate 56
new trade deals just to stand
s?ll
• Major Anglo speaking na?ons
already sugges?ng swi deals
• City of London posi?on likely to
be enhanced by poten?al
incen?ves to stay in UK
• Possible move to “tax haven”
status
• Likely Corpora?on Tax moves
• Loss of Triple A status
confirmed
• 44 years of UK law and EU law
being entwined
• Repeal of 1972 European
Communi?es Act would
require huge effort to unravel.
• UK will retain membership of
UN, NATO, G7 and G20
• Regains seat on WTO
• Possible reform of poli?cal
system opportunity
3

4. Single Market

5. Complexity of European Structures - Not just one EU
Source:Wikipedia
5

6. • If the UK joined the EEA it would have to accept
freedom of movement rules.
• “Passpor?ng” of financial services would be
guaranteed.
• Have the costs of implemen?ng all regula?ons and
standards without any influence over their future.
• UK would have to make a significant contribu?on to EU
budget for access. Norway pays approximately 80% of
its es?mated full cost of being a member.
VERDICT : IMPOSSIBLE POLITICALLY FOR UK
• Swiss style bi-lateral agreements on the areas of
agreement ( Difference from EFTA being its not a total
package and aforemen?oned confla?on with EEA
membership).
• Cherry picking would concern EC that they were giving
access to single market on the cheap.
• Likely limita?ons on sectors.
• UK becomes a follower on sectors it agrees to. Deal can
change.
VERDICT : POSSIBLE BUT EU MAY NOT LIKE IT
• Full Free Trade agreement. Access to the single market.
• Some requirement for Freedom of Movement. Unclear.
• UK would regain it’s right to nego?ate FTAs with all other
countries.
• Implement EU rules when accessing single market.
• EFTA is conflated with EEA due to virtually all EFTA
members being EEA members.
• Freedom of movement is enshrined in EEA but is not
necessarily so for EFTA. When EFTA was established it
did not include this and could easily become so again.
VERDICT : POSSIBLE. DEPENDS ON THE FINAL DEAL
• Fine for the UK. Poli?cally damaging for the EU.
• Obviously UK would regain it’s right to nego?ate FTAs
with all other countries.
VERDICT : IMPOSSIBLE POLITICALLY IN EU MEMBER
STATES - LIKELY SIGN OF BREAK UP OF EU
• It is most likely that there will be a bespoke deal created for the ongoing rela?onship.
• Any a]empt to enforce “Freedom of Movement” rules as part of a deal is likely to be swily rejected by the UK.
• UK likely to face concerted a]empts by the European Commission to block any deal that will look good to others that may wish to leave if they see
the UK genng a good deal. EC will a]empt to make sure deal is not be]er than present deal to “Pour Encourager Les Autres”.
• Any deal that threatens the single market par?cipa?on of others may be conten?ous to sell in certain member states (par?cularly France).
• Below are the op?ons that have been put in place previously and have drawn inevitable comparison.
• internal tariff barriers are avoided.
• UK would s?ll have to implement product regula?ons.
• Access to financial services is not covered. Sector
coverage is limited.
VERDICT : NO GUARANTEE FOR THE CITY OF
LONDON ON PASSPORTING MEANS NO DEAL
• “Most favoured na?on” status is trading under WTO
GATT rules.
• It will almost certainly mean tariffs being placed on
goods between the UK and the EU.
• It will not be favoured by either side and is inconsistent
with the UKs approach to the liberalisa?on of trade.
“Customs Union” (Turkiye deal) EEA (Norway deal) EFTA
6
Swiss Style - Bilateral Agreements FTA Based Approach – Single Country MFN Based Approach
VERDICT : A FAIL FOR BOTH SIDES
DOING EACH OTHER CONSIDERABLE HARM

7. Policy Areas – What will the future hold?
UK PerspecUve EU PerspecUve
Trade with each other Likely to conUnue to fall as the UK
goes global
Trade with outside world Likely to rise as UK goes global.
Investment likely to be sustained as
long as UK demonstrates
compeUUveness quickly
RegulaUon Highly likely in long term to be
lighter. Possible repeal of EU rules
Industrial policy Possibly a return to low regulaUon
and repeal of employment
legislaUon
Financial world City of London likely to be
challenged over Eurozone products
in long term
Budgets UK gains return of money but may
lose benefit if growth slows
Risk and exposure UK risk profile likely to be higher.
New trade deals need to come
quickly to calm markets
ImmigraUon Will reduce due to poliUcal will.
May hurt compeUUveness
Supra-naUonal influence Unlikely to change short term. Long
term will depend on alliances
Conclusion UK needs to make trading alliances
quickly and needs to incenUvise
business to remain paUent
Trade with each other Likely to conUnue to fall as the
UK and EU relaUonship becomes
less necessary
Trade with outside world Possible expansion to compete
with UK
RegulaUon Highly likely to be heavier
without UK liberal influence
Industrial policy ProtecUonist. Likely to get more
burdensome for employers
Financial world Eurozone products gradually
drig away from London
Budgets EU loses major contributor.
Unrest in Germany over
increases already prevalent
Risk and exposure Heightened by above and real
risk of EZ meltdown not yet
dissipated
ImmigraUon Unlikely to reduce near term.
Humanitarian influence likely in
play for elecUons
Supra-naUonal influence ConUnue to be strong but will
need greater defence spend
Conclusion Likely to try and push for more
integraUon. Become “Fortress
Europe”
7

8. Our Approach

9. Why are we different?
Standard
Change
Offerings
Proven Delivery
Experience at Mul?ple
Businesses
Knowledge of Market,
industry and Product
SME / Prac??oner
Knowledge Of Business
Proven Delivery
Experience
Knowledge of change management, business from project standpoint
• Eyestorm Consul?ng only deploys people with
prac??oner industry experience to our
programmes of work. They operate as SME and
project resource (Some?mes called implementa?on
managers) so they do not need to draw on support
from the business permanently and are also able to
suggest best prac?ce alterna?ves.
• Eyestorm runs an associate model, allowing us to
choose the right person for the job, not the person
sinng on a bench wai?ng to be deployed.
• All of our associates have a minimum of ten years
experience in the field of exper?se they will be
engaged upon and not just a similar or supposedly
related discipline. They also have to have a proven
track record of delivery at several client sites/
businesses
• We endeavour to fully understand our clients
business model before engagement and work hard
with them to make sure we find appropriate
exper?se that will fit their corporate ethos and
environment.
• We ins?ll your values in our teams, not try and
install our values in yours.
9

10. For more Informa?on on “Brexit” and what it will mean to your business
10
Iain Bonner-Fomes
Managing Director
Programme Director and Advisory Consultant
+44 7415 529777 (UK)
+852 6391 9173 (HK)
iainbf@eyestormconsul?ng.com
Eyestorm Consulting Ltd
145-157 St. John Street
London
EC1V 4PW

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This document is for informa?on purposes only and it should not be regarded as an offer to sell or as a solicita?on of an
offer to buy the securi?es or other instruments men?oned in it
Informa?on in this document has been obtained from various sources; we do not represent that this informa?on is
accurate or complete and it should not be relied upon as such. Opinions expressed herein are subject to change without
no?ce.
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