UK Finance’s ‘Serving Europe: Navigating the legislative landscape from outside the single market’ report has been produced to close an important gap in the developing public analysis and understanding of the implications of Brexit for EU customers of UK-based banks. It identifies the very broad differences among individual EU Member States in their treatment of bank products and services offered by ‘third-country’ banks (which is what banks serving EU customers from the UK will become on the UK’s withdrawal from the EU if no transitional arrangements are agreed), and illustrates the implications of such differences for the continued availability of important products and services for EU27 customers in individual EU Member States.
Working with our partners, the law firm of Slaughter and May and leading law firms in each of twelve Member States, we have surveyed the national licensing regimes of twelve sample EU jurisdictions (Belgium, the Czech Republic, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Poland, Portugal, Spain and Sweden), assessing not only local law and regulation, but also the current practices of relevant national supervisors with respect to branching and subsidiarisation, the availability of exemptions or cross-border authorisation regimes for banking and securities services, and the feasibility of a UK-based bank establishing a fully licensed local branch or subsidiary in that jurisdiction.
Our report shows that in the event that transitional arrangements are not agreed prior to the UK’s withdrawal from the EU, some EU27 customers located in less restrictive countries may be able to benefit from their national licencing regime to continue to access some services from their UK-based provider. With alternative mitigants such as ‘reverse solicitation’ shown to be impractical and burdensome in the short-to-medium term, these benefits could prove particularly important for those EU27 export-orientated businesses until a new market equilibrium emerges.
An executive summary is also available in German and French from the downloads below.