Insights for Leaders
One might have thought an industry employing over 1 million people – and accounting for more than 10% of the UK’s tax revenue – would have received more attention in Brexit trade talks than fishing rights.
The financial services sector, however, took a back seat to EU fishing boats, sowing uncertainty for the industry writ large. More than a month after UK and continental negotiators finalized their divorce agreement, open questions abound. For instance:
- Which areas will be granted “equivalence” by the EU, thereby granting UK financial firms market access?
- What about the numerous areas (e.g., payment services, deposit taking, electronic money) that have no equivalency regime?
- Now that “passporting” – which enabled a regulated entity to freely open branches and sell its products and services within the EU – has ended for the UK firms, how will they navigate potential roadblocks in setting up shop in the EU?
- How might regulatory regimes between the EU and UK evolve and/or diverge – and what impact might they have on the broader marketplace?
The answers to these questions – and the ways in which financial services firms respond – will emerge in the coming months and years, with significant market implications in London and beyond.