BREXIT Q&As

Financial services are a vital component of businesses’ supply chain. While financial institutions are already putting in place plans to make changes to their business and operations to maintain the continuity of financial services as the UK exits the EU, other businesses are perhaps less aware of the potential implications of these changes to how they continue to access financial services during this period.

While most businesses are currently focusing on the commercial considerations and the direct impacts of Brexit on their business operations, including movement of goods across borders, it is also important that they are also aware of important changes that may take place in the financial services sector, so that they understand what this means for how they access financial services in the UK and the EU, and if necessary, can take action to avoid any disruption that may arise as a result of Brexit. While an agreement in principle has been reached on a transition or implementation period running from 29 March 2019 to the end of December 2020, this is yet to be finalised, and so these Q&As will focus on a “no deal” outcome, where there is no transition period and the terms of access for financial services between the UK and the EU will fall back on WTO rules.

In the absence of agreement on a formal transition period, HM Treasury and the Bank of England have set out plans for a temporary permissions and recognition scheme, which will allow EU-authorised firms who wish to continue serving business clients in the UK, to operate in the UK for a limited period after withdrawal while they seek authorisation or recognition from UK regulators. The UK Government has also indicated it may lay additional legislation, if necessary, to ensure contractual obligations not covered by the temporary permissions regime can continue to be met. The ACT have developed a set of key issues and questions that corporate treasurers and those with risk management responsibilities may find helpful to consider in the context of Brexit. We are compiling responses to these questions by consulting members from the FS sector, UK regulators and other stakeholder groups with the aim of providing a set of Q&As to inform businesses. This will provide general advice to firms and will not constitute legal advice.

Disclaimer: This material is for general information only and is not intended to provide legal, accounting or other professional advice. Neither the Association of Corporate Treasurers nor any of its officers or employees nor any persons from whom it seeks advice in response to questions can accept responsibility or liability (express or implied, contractual, tortious or otherwise) for the correctness or timeliness of any response. Accordingly, users of this material should not rely on it but should consider taking their own professional advice. The views and opinions expressed are not necessarily those of the Association of Corporate Treasurers or of the legal, accounting or other members of its Council. In no event should this material be viewed as investment advice. Any user of this service who requires advice on investments or securities should obtain it from an organisation duly authorised under applicable legislation. We will update this schedule as new questions are raised and as answers are received.