Brexit, Single Market and passporting rightsMohammad Haque
Brexit means United Kingdom is leaving the European Union that effectively means UK will come out of the single market and the customs union. The withdrawal from single market means UK will lose its passporting rights.
What is passporting right ?
Passporting rights allow UK financial services firms to sell their services and operate across the EEA without significant regulatory barriers. This arrangement gives businesses in financial services to operate in the regulated sector in other EEA states without needing further licences/authorisations.
It allows a bank authorised in the UK to operate in another European country without obtaining a licence or being authorised from the local regulatory body. This means the borders are frictionless within the EEA and, therefore, allowed the financial sector in the UK to thrive through accessing the consumers all across the continent.
Currently, UK is negotiating a deal with European Union to keep the maximum benefit of the single market without being part of it. It remains a challenge whether UK could keep its passporting rights and operate as usual or a separate arrangement can be agreed on to ensure that important sectors do not suffer as a result of Brexit.
If you are an EU financial institution operating in the UK through your passporting rights and would like to discuss on mitigating the risks of Brexit, please contact us using the details available here.
In case, you are a UK firm and want to ensure continued services even after Brexit in other EEA states please get in touch.