Brexit ‘no deal’ WTO situation—implications for Financial Services
Produced in partnership with Tony Katz and Puesan Lam and Paul Hardy of DLA Piper
Brexit ‘no deal’ WTO situation—implications for Financial Services

The following Financial Services guidance note Produced in partnership with Tony Katz and Puesan Lam and Paul Hardy of DLA Piper provides comprehensive and up to date legal information covering:

  • Brexit ‘no deal’ WTO situation—implications for Financial Services
  • The EU Single Market for Financial Services
  • What practical steps should financial institutions take to prepare for a ‘no deal’ WTO situation?
  • Passporting rights

This Practice Note considers the impact on the UK financial services sector in the event of a ‘no deal’ World Trade Organisation (WTO) Brexit outcome (where there is no deal between the EU and UK and the parties fall back on the WTO rules) and does not consider transitional provisions that may be put in place between the UK and European Economic Area (EEA).

The EU Single Market for Financial Services

Financial institutions (banks, investment firms, fund managers, insurers, insurance intermediaries, mortgage credit brokers, payment institutions and e-money issuers) across the EU benefit from the EU Single Market for Financial Services which is based on the principle of mutual recognition and harmonisation of standards.

One of the key features of the EU Single Market for Financial Services is the ‘European passport’. This allows financial institutions to carry out their activities across the EU without setting up a separate entity and/or obtaining separate authorisation in each EU Member State. Financial institutions have a choice to either set up a branch (which is subject to certain 'host state' rules) or provide services on a cross-border basis.The level of impact on financial services depends on whether a passport is required for the services to be provided within the EU. A study for the European Parliament’s Committee on Economic and Monetary Affairs (ECON) showed that