How will Brexit affect your business?
- Author : Novia Financial
- Date : 3 Dec 2020
Brexit and your business – transition period end 31 December 2020
So here we have it: the transition period ends on 31 December 2020, but we still don’t know if we’re going to get a ‘trade deal’ and that negotiation window is getting smaller by the day.
The impact to the financial services industry – let’s be honest – is really complex in terms of all the legalities and regulatory framework and there’s no getting away from this. We don’t know how Brexit will really hit but there are some obvious conclusions we can draw. Brexit will impact UK-based financial firms who currently rely on passporting out to the EEA. With passporting potentially going, if there’s no deal or if the ‘new deal’ doesn’t include financial services, carrying out regulated activity in the EEA territory could be a thing of the past, unless of course you’re getting geared up for this and spend the time and money needed to get direct authorisation from the regulators in the European country where you want to do business. If your business is only about UK financial advice then you might not expect there to be any impact, including possibly looking after your EU clients if you advise them in the UK. However, you should always do your own research so that the channels are clear for the sail ahead for a compliant business.
As for passporting-in dilemmas, for inbound EU firms and investment funds the FCA’s temporary permissions regime (TPR) has provided a solution, albeit a temporary one, to allow firms to continue their regulated activities in the UK. From what we’ve seen, TPR has been supportive at least on the trading front; the majority of offshore fund providers have registered, allowing clients a greater and more diverse range of investment assets from which to choose. These Providers of course still have to work towards obtaining permanent FCA permissions, but they have some time to do that now.
Banking services for EU based customers
Finally, you will no doubt have heard or read in the press how a few well-known UK banks have been trying to tackle Brexit compliance issues by opting to close their banking services to EU based customers, including ex pats, which might affect your EU clients. But all of them work differently and the situation does seem to depend on where a customer lives in the EU for the retrospective legislation. UK bank account closures are by no means the norm; many are continuing to provide UK banking services, so clients should still have options.
Read more on Brexit here.
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