Brexit & the City

It is well understood that the post brexit trade deal excludes services including financial services, what does this mean? Here are my notes, which I converted into a piece on linkedin …

Links

On regulation

1. What is ‘passporting’ and why does it matter?, on passporting, from BBA, the voice of banking
2. What is ‘equivalence’ and how does it work? on equivalence, from BBA, the voice of banking
3. UK–EU future relationship: financial services , the Institute for Govt, 19/12/2020
4. What does the brexit trade deal mean for financial services?, from UK in a changing Europe
5. UK EU trade agreement, what next for financial services, by DLA Piper, 4 Jan 2021. They raise the issue of regulatory co-operation which might be seen as a pre-requisite for international trade in financial services.
6. FINANCIAL SERVICES REGULATION UNDER THE UK-EU BREXIT DEAL, from Shearman & Sterling, ‘it looks likely that for financial services 1 January will prove to be a “hard” Brexit, requiring implementation of most aspects of firms’ contingency plans.’

From the DLA piper blog

UK and EU firms, as well as national and pan-EU regulators, have been putting in place contingency measures to allow cross-border business to continue in the event that no agreement is reached.

In the UK, these measures have primarily consisted of a temporary permissions regime which allows EU firms to continue doing business in the UK without local authorisation for a period of time. No pan-EU temporary permissions regime exists for UK firms seeking continuity of business. Instead, UK firms have proceeded to either scale back their EU business, subsidiarise and seek EU Member State authorisation and access to passporting, or else to rely on local EU27 national measures (such as overseas persons regimes, which exist in certain countries) and/or on conducting business with EU customers on a reverse solicitation basis.

Here’s the treaty,

1. TRADE AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN UNION AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, OF THE ONE PART, AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, OF THE OTHER PART on europa, of course

Also

1. EU share trading flees London on first day after full Brexit by the FT
2. Brexit: The City of London Faces a New Big Bang – from Bloomberg
3. Digital banks win UK-EU expats’ accounts, from the FT, detailing the withdrawal of traditional retail banks from the EU, includes the Lloyds’ story.