In the Brexit negotiations, unexamined assertions have been increasingly used as political tools in an attempt to coerce the UK into a situation from which there can be no satisfactory resolution. The latest concern is the alleged legal ‘cliff-edge’ that is claimed to arise on Brexit, under which, it is feared, exising financial contracts, particularly derivatives and insurance contracts, will become illegal to perform after Brexit. This thinking then triggers a chain of reasoning which threatens to reduce the chances for financial businesses of getting the best type of Brexit deal. The ‘reasoning’ is that, to obtain a transitional deal, the UK must concede on whatever is necessary. Otherwise UK-based financial institutions will exercise contingency plans to move business to the EU-27 to avoid the cliff edge. It requires the UK to make whatever further concessions are required to obtain a deal permitting mutual access for financial services, after the transitional period has expired, regardless of its conditions (and despite the UK potentially having to apply increasingly stifling EU regulation), again in part to avoid the cliff edge. On closer examination, the perceived cliff edge making such a dangerous chain of reasoning seem inescapable is largely in the mind, asserting that when the EU’s regulatory perimeter springs up after Brexit, with the UK outside it, contracts between UK financial businesses and EU customers or counterparties become frustrated. But that ignores the existence of the public international law doctrine of acquired rights, as well as rights to property under the European Convention on Human Rights and the EU’s own Charter of Fundamental Rights. Each of these regimes applies to contracts in existence at the point of Brexit and protects their performance from interference, including from any supervening regulatory barriers. The protections also cover any options embedded in the agreements. Even now, parties can use these regimes to adjust their contractual relationships, prior to Brexit, in order to ensure a smooth Brexit and to increase the longevity of current arrangements. Businesses should remember that already things are more certain than the scaremongering implies. First, many pre-Brexit contracts will not be covered by EU regulation bouncing up after Brexit since the regulated provision will already have occurred when the contracts were entered into. So the contracts can continue to be performed without interference. Second, many types of financial services contract are not in fact cross-border in law and so the provision of the service by UK businesses to EU27 customers will not be caught by EU regulation. For the residual category of financial contracts which could in principle be caught by EU regulation arising on Brexit, the position will in fact be determined in most cases by international law acquired rights as well as rights to property. The rights to property are contained in the ECHR and the EU Charter. They cover contractual rights which have a financial value. It is hard to conceive of financial products which are not protected by this concept. The likelihood of contracts attracting ECHR and Charter protection can be enhanced still further by reviewing their terms, for instance on assignment and termination. An additional safeguard is also provided for under the international law acquired rights doctrine, whereby parties who have contractual rights with a calculable monetary value are shielded from state interference after a treaty has come to an end – in this case the EU treaties. Although, where the public interest requires it, there is an exception to these principles, it is difficult to see how a valid legal case could be made to apply the public interest exception. The UK will, through the EU Withdrawal Bill, be applying identical regulations after Brexit for the foreseeable future, as supervised by regulators who are currently EU regulators. In fact, taking the opposite view would be hugely disruptive to the markets, contrary to the interests of the EU27 and UK publics. In the world of investment business conducted with large corporate and professional counterparties in the EU27, it is even possible to combine these protective regimes in advance of Brexit with the EU’s new laws on reverse solicitation. As a result, after the UK’s withdrawal, a wide array of services can continue to be provided pursuant to pre-Brexit contractual arrangements. This facility arises from a codification of concepts currently embedded in the laws of Germany and various other member states. EU wholesale market customers are allowed to reach outside the EU and escape from EU regulation in certain cases if they express a clear wish to do so. They can make their views known prior to Brexit in a manner that is continuing so as to avoid having to go to the effort of repeatedly expressing their wishes subsequent to Brexit. Once this has been done, they will be choosing to be protected by UK regulation alone and UK providers can carry on servicing their needs under pre-Brexit contractual arrangements. So it wrong to talk about cliff edges. Instead it is possible, using property and acquired rights protections, as well as the reverse solicitation exclusion, to put in place arrangements in advance of Brexit which provide for business continuity, even in the case of a so-called hard Brexit. It is also wrong to assume that by making unnecessary concessions to the EU (such as making a Brexit payment which in law is not due) the UK will secure its own, relatively straightforward goal of a free trade deal. What we have learned from the negotiations is that the EU is neither reasonable nor acting in the best interests of its citizens. If it were, it would seek a free trade deal first and foremost and so give a degree of certainty to the many troubled or unstable economies of the Eurozone. For the UK, given there is no cliff edge, the suggestions for a transitional period should be rethought. Tax incentives and the removal of regulatory red tape (whilst ensuring the markets are safe and the UK taxpayer is protected) should be evaluated as an alternative. As Commissioner J. Christopher Giancarlo, Chairman of the US Commodity Futures Trading Commission, said recently: “the European Union favours a highly prescriptive and rules-based approach to financial market supervision.” The UK can reverse out of this state of affairs and cushion the industry from the financial effects of a no-deal Brexit. In determining the best outcome, account must be taken of the fact that, depending on its wording, the City could be rendered less competitive by a transitional deal. The UK might have to apply new, prescriptive EU laws, formulated in a manner unconstrained by the UK’s liberal influences. It could be asked to collect a Eurozone financial transactions tax, to which the markets rightly object. Euro clearing could be required to be moved to the Eurozone, where ECB-controlled margining and haircutting of euro credits could inflate an explosive bubble of euro credit valuations. Similarly, any ultimate financial services trade deal – sought in desperation – could well be equally as unattractive (if not more so). The UK could become in essence a rule-taker from an increasingly restrictive, dogmatic and undynamic EU system. Now is the time for careful, dispassionate and unhurried analysis of the industry’s true position. Such a step is essential for an optimised outcome. The reality is that most current financial services business can, even on a hard Brexit, not only avoid any cliff edge, but (with a little innovation) can continue to be conducted with EU customers as it is now, without moving much, if any, infrastructure or personnel to the ongoing EU. If businesses work out their planning on this basis they will boost their own commercial outcomes, maximising the clustering benefits from the global financial centre hosted in the UK, whilst assisting the UK government in determining objectively whether the proposed terms of any transitional or final trading arrangement with the EU are attractive or should be rejected.