What does a post-Brexit financial services industry look like? The European Commission just provided a possible peek into the future.
In big Brexit news, the European Commission published seven technical notices Thursday, outlining future rules relating to banking and finance. The notices aim to prepare all stakeholders for when the UK withdraws from the EU on 29 March 2019. While acknowledging the possibility that a yet-to-be negotiated agreement could alter both the terms and effective date of withdrawal, the notices foresee a “hard Brexit.” The Commission set out what that would mean for UK firms currently operating under EU banking and finance rules.
The notices break down seven distinct market segments and refer to applicable EU regulation within each. The segments addressed are:
- MiFID firms
- Banking and payment services
- Post-trade financial services
- Asset management
- Credit rating agencies
- Insurance and reinsurance
- Statutory audit
The notices are useful in terms of their thoroughness but only address the simplest type of divorce scenario – a hard Brexit. Regardless of the ebbs and flows of politics and the negotiations to date, some form of compromise is still very much a possibility. We maintain that even after the publication of these notices, on top of months of deliberation, it’s still unclear whether we will ultimately see a soft, medium, or hard Brexit.
In this video, we explore those three options and what that could mean for the asset management industry.