Certain things would end
While the Brexit saga has led to much overall confusion, some things are at this stage pretty much certain. Prime Minister Theresa May has made it very clear, for example, that passporting, or the right of financial firms which are regulated in one EU nation to operate in all of the others, will come to an end in the event of any sort of Brexit, let alone a no deal one. “If we were to accept passporting we would just be a rule taker, we would have to abide by the rules that were being set elsewhere”, she said. Of course, none of this will apply in the event that Britain doesn’t actually end up leaving the EU, but that still appears to be something of an unlikely scenario.
The government’s plans would kick in
The government has, however, set out a number of contingency plans for what would occur in the event of no deal. One proposal released by the government said that it would set up a Temporary Permissions Regime permitting EEA-based companies to continue with passporting for three years in the aftermath of Brexit, to give them time to obtain the relevant permissions. However, many commentators agree that while a no-deal Brexit could be OK from the point of view of financial services being sold to Britain, exporting financial services to Europe could be a headache given that Britain will no longer have passporting rights.
While nobody has a crystal ball which can predict the future with full accuracy, there is a good chance that certain developments would occur if the UK leaves the European Union without a deal next year. A no deal Brexit would mean the end of a number of major initiatives such as passporting, for example, while it is likely that some of the government’s pre-arranged plans would come into force – meaning that a temporary arrangement might be possible. However, in among it all, the only thing that is truly predictable is that there would be an environment of large-scale uncertainty, which could in turn lead to less investment in Britain’s finance industry for months or years to come.
Ensure your finance function is as robust as possible in the face of Brexit uncertainty. This page explains how we can help you achieve that goal. And our “Top trends in 2019” guide is a great read if you’re interested in what else next year could hold.