Business as usual for firms during Brexit transition, says Bank of England
The Bank said European finance firms will be able to continue using existing passport rights until the end of 2020.
The Bank of England has confirmed European banks and finance firms will be able to operate in the UK under existing rules until the end of the Brexit transition deal.
Following the agreement reached last week, the Bank said that lenders and clearing houses will be able to continue using existing passport rights to operate in the UK throughout the transition period until the end of 2020.
The Bank said it was “reasonable” for these firms “to plan that they will be able to continue undertaking these activities during the implementation period in much the same way as now”.
“The Bank has made clear to relevant firms that they may plan on the assumption that UK authorisation or recognition will only be needed by the end of the implementation period,” the Bank added.
The impetus is now on EU regulators to follow suit, and for both sides to work together on cross-border models of supervision. Stephen Jones, UK Finance
A 21-month transition deal was agreed at an EU summit this month, giving firms more time to meet new rules under Brexit and prepare their contingency planning.
While it is not final, the Bank said firms should have confidence in a “back-stop” provided under government plans to legislate, if necessary, to create temporary permission regimes to allow relevant firms to continue their activities in the UK for a limited period after withdrawal.
The Financial Conduct Authority (FCA) also welcomed the transition deal and said it will report back with further details on the temporary permission regime later in the year.
Lobby group UK Finance said the announcements offered “much-needed clarity” for firms.
Stephen Jones, chief executive of UK Finance, said: “The impetus is now on EU regulators to follow suit, and for both sides to work together on cross-border models of supervision that businesses on both sides of the Channel can rely on throughout the implementation period.
“Without similar assurances from EU regulators, UK-based firms serving customers in the EU will be forced to continue implementing costly contingency plans.”