The trade and security deal the UK Government struck with the EU is a bare-bones deal for tariff-free trade in goods. For many other business sectors that are not covered by the trade deal it means a no-deal outcome creating significant frictions and less EU market access from 1 January. Below we explore what it means for the Financial Services industry.
Snapshot:
Brexit deal outlook: The financial services industry will lose some access to the EU market. However, banks have restructured and moved some staff and operations to the EU – to a loss for the London City.
Overview:
For asset managers, the Brexit negotiations have not been terribly exciting from the perspective of their own operations. The talks were focused on the physical movement of goods rather than on service industries and so it was expected that the trade deal would initially not cover access to the EU market for the industry.
Firms in the sector have either concluded that they will not be seriously impacted or have long ago put measures in place to allow them to continue to operate as they need to in the EU by opening offices and moving staff. They will generally be hoping for an equivalence agreement in the long-term, which should improve the overall economic outlook, but again a lot of the funds managed out of London are global rather than domestic in focus.
Private Equity and Venture Capital funds will be sharing the same fears as any other investors in UK SMEs and will have been working with their portfolio companies, which will typically operate in a wide range of sectors, to identify Brexit risks.
Would you like to know more?
If you would like to learn more about how Brexit may impact you, please visit our Practical Guidance: Brexit hub here.
And if you have any questions or would like to discuss your specific circumstances, please get in touch with your usual Blick Rothenberg contact or one of the partners on this page.