A “hard Brexit” unless there’s agreement on a transition period
Brexit is scheduled for March 2019 unless there is agreement between the EU and the UK on a later withdrawal of the UK from the Single European Market. Part of the withdrawal agreement would be a transition period during which European Union law would remain applicable in the UK. This would allow for financial institutions in the UK and the EU to make the necessary changes to their business models and set up with some time to plan and implement. Also, there is the hope that there will be agreement on grandfathering rules or adapted passporting or similar agreement that would ease the impact for financial institutions. Although there is hope, you shouldn’t be complacent but rather take a close look at our Checklist for Brexit preparedness…
No wait-and-see approach
While there have been many statements welcoming a transition period, political progress on the major issues in the withdrawal agreement has been slow. In light of this, the EBA has issued an Opinion on the preparations for the withdrawal of the United Kingdom from the European Union dated 25 June 2018. The EBA urges financial institutes to prepare themselves for a “hard Brexit” and not to adopt a wait-and-see approach. In the EBA’s view, proper risk management includes assessing the risks arising from Brexit for financial institutions and having a plan B ready or even implemented.
Given the myriad of laws and interdependencies created by a single legal framework that will cease to exist, the task is daunting. Here comes help!
Checklist for Brexit
To get a first overview of what the EBA suggests to do, have a look at our checklist infographic to prepare for the worst.
Here you go with PayTechLaw’s Checklist for Brexit.
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