Brexit Update w/c 23/3/20
Read on for this week’s Brexit Update.
Simmons & Simmons LLP – Webinar on Providing Regulated Services in the EU Post Brexit Transition Period
The webinar held on 18th March concentrated on providing regulated services post Brexit into German and Netherlands however the salient points were:
1. Confirmation that the routes ‘into’ servicing EU based clients will be:
- reverse solicitation
- national regimes if available (e.g. Germany, BaFIN can grant an exemption under Banking Act (note this is not a licence)
- establish a regulated entity in the EU
2. Speakers from both Germany and Netherlands said a sustainable business model cannot be based on Reverse Solicitation
3. Rumours circulating in both Germany and the Netherlands that the transition period will be extended (due to Covid-19)
4. Outsourcing is high on the Agendas of Regulators of both jurisdictions due to it being high priority with the European Banking Authority. Specifically:
- Requirement for prescriptive termination rights
- Requirement for exit management plans for all outsourcing
- Increased access and audit rights for institutions
Above must be implemented by end of 2021
Both speakers gave an overview of digitalisation and cyber risk affecting the integrity of the financial system. Both Regulators have issued paper on Environmental, Social and Governance.
Rishi Sunak, Chancellor of the Exchequer, wrote to Valdis Dombrovskis, Executive Vice President of the EU Commission last month on equivalence assessments. The letter states that both sides should start to assess equivalence as soon as possible, on the basis of the Political Declaration, with a view to completing the exercise by the end of June (but not taking decisions by that date). The EU is currently mapping equivalence areas and plans then to contact the UK for information. The letter sent by Rishi Sunak can be found here
Note that The UK can negotiate, sign and ratify international agreements but they cannot enter into force or apply during this period unless authorised by the EU.
Preparing for End of Transition Period – Government Questionnaire for Businesses and Individuals
There will be new rules for living, working, travelling and doing business in the UK and EU from 1 January 2021. With the intention of assisting businesses and individuals to prepare, the Government have issued a questionnaire on what action they should take to ensure they are prepared. The questionnaire can be found here www.gov.uk/transition-check