Brexit - Financial Services
Critical issues for businesses to consider:
- European Supervisory Authorities: The UK Withdrawal Agreement makes no specific provision for financial services. It does, however, provide that the UK will have continued access to the European Supervisory Authorities (EBA, ESMA, EIOPA) during the transition period.
- Provision of cross-border services: From the end of the transitional period in December 2020, UK firms will lose the benefits of delivery of cross-border services to retail clients throughout the EU. However, various key EU Directives contain an equivalence mechanism (deeming a third country to apply equivalent supervisory standards as the EU) and thereby enabling cross-border access for UK firms. There is, however, a serious limitation in that the Equivalence mechanism only extends to professional clients in the EU and does not extend to retail clients.
- Equivalence Process: The outline Political Declaration accompanying the Withdrawal Agreement encourages prompt initiation of the Equivalence process to ensure that continued access is available for UK firms to professional clients within the EU.
- Overseas Person Exemption: In Ireland the Overseas Persons Exemption, will also enable continued cross-border access by UK firms to professional clients in Ireland under domestic Irish law.