EY’s response to the EU ‘transition period’ announcement from a financial services perspective

John Liver, Banking Partner and Regulatory Reform Leader at EY, comments:

‘A restricted transitional timeframe, if agreed, and the falling away of UK membership of EU trade and other agreements with third countries on the withdrawal date will not be welcomed by the financial services industry. This increases the risk of disruption in serving customers, and the industry will now be looking to policy makers to help mitigate these risks.’

…and the PRA’s consultation paper published today

Omar Ali, UK Financial Services Leader at EY, comments: ‘Allowing wholesale firms to continue to operate in the UK as branches, rather than making them trap capital in new subsidiaries, is good news for both the UK and the EU. Crucially it means more jobs will remain in the UK and helps to cement the UK’s position as the world’s leading financial centre.

‘The PRA has today made a strong statement on the benefits of open, global and efficient wholesale markets for pension funds and companies wanting to obtain funding or manage or insure risk. Firms will still need to adapt to a new non-EU branch regime, and institutions with significant retail business will have to change their structures to limit the potential for retail disruption. However, today’s announcement is a welcome and powerful signal that the UK remains open to global business after Brexit. It also demonstrates confidence that there will continue to be strong regulatory co-operation between the UK and the EU.’
Source: Ernst & Young Global