Brexit: City vents at EU’s failure to reciprocate on no deal regime
The City has vented its frustration at the EU’s apparent failure to grapple with the regulatory challenges posed by a no deal Brexit.
Work in the UK has begun on a ‘temporary permissions regime’, allowing EU firms to continue passporting into the country in the event of a hard Brexit, in which scenario there would be no transition period. But multiple figures in the Square Mile told Morning Wire there are growing concerns that the EU is refusing to do likewise.
One said: “It hasn’t really been addressed and it desperately needs to be addressed… The UK has opened up and it has not been reciprocated.”
Work had been undertaken “constantly” to get the message across that market access must be maintained in all eventualities, “to get them to recognise that as an issue,” the source said, but without any apparent progress.
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Another added: “There’s not a huge amount happening – everything is political at this stage.”
However Standard Life Aberdeen co-chief Keith Skeoch was more sanguine about the state of affairs. In an interview with the Evening Standard, he said: "National regulators will talk to each other and they will put good transitional arrangements in place.
“There isn’t an issue in asset management and very few issues in financial services.”
The Treasury has already started setting out legislation under the EU Withdrawal Act, and the Financial Conduct Authority will consult on the proposals for the regime – which is expected to last for a maximum of three years – and fees this autumn. Firms are expected to be able to start requesting use of the regime from early January.
Nausicaa Delfas, executive director of international at the FCA, gave a speech last month in which she noted that while the watchdog was delivering what was “in our gift”, there was no resolution in sight for outbound UK firms seeking to continue their activity in EU markets.
“Currently there is no reciprocal ‘TPR’ arrangement from the EU, and the challenges this presents, in terms of lack of commercial certainty, and business disruption, is clear from my speaking to senior leaders in regulated firms,” she said.
A spokesman told Morning Wire: “We remain closely engaged with our EU27 regulators and Esma (European Securities and Markets Authority) both on the day to day business of being an EU member, but also on issues related to EU withdrawal.”
No one from Esma could be reached for comment, with many voicemails simply saying the person was on holiday.
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