PRESENTATION TO ECLA SEMINAR ON 4AMLD Alex

Transcript:PRESENTATION TO ECLA SEMINAR ON 4AMLD Alex:
PRESENTATION TO ECLA SEMINAR ON 4AMLD Alex Merriman Consultant, 95CPR LTD IALS, 7th November 2016 Presentation: UK Financial Services in the Age of Brexit Outline INTRODUCTION: THE IMPORTANCE OF FINANCIAL & RELATED PROFESSIONAL SERVICES TO THE UK ECONOMY UK Financial & Related Services FRPS Represent – UK-wide: Some 12% of Gross Domestic Product (2014); and Account for 2.2 mn. jobs Not just in London, but also in Edinburgh, Glasgow, Leeds, Manchester, and even Bournemouth (two thirds outside London) Generating the largest global trade surplus of $95bn (twice that of the US) Other stylised facts: 250 foreign banks in the UK The UK financial sector leads in FX, fixed income and OTC derivatives trading, and cross-border lending £6.2tn in assets under custody (2013) Home to 4/10 Global law and 6/10 accountancy firms (by fee income) 500 foreign companies listed on the LSE and AIM English law governs 40% of global corporate activity SOURCES: CITY UK & CORPORATION OF THE CITY OF LONDON Where are we now with brexit? What we know about Brexit (1) HMG says it will trigger Treaty Article 50 by the end of March 2017 Notional 2 year negotiation period means that UK will not exit the EU until Spring 2019 at the earliest Great Bill Repeal through revocation of ECA 1972: removal of ECJ as ultimate arbiter Until then all EU Laws & Regulations continue to apply, until and unless repealed: particularly for financial services laws Impact on timetable of Constitutional Challenge? HMG deems this not significant What we know about Brexit (2) HMG have said that Financial Services are one of the UK’s priority sectors in any settlement with the EU EU are clear that access to Single Market must mean Free Movement of People Negotiation outcome is very uncertain: first MS exit Much will depend on whether the settlement of UK rules contains “grandfathering” or whether full equivalence tests are applied de novo Are transition periods feasible? (Banks very keen on this) Looking ahead: What are the Options? Brexit Options: Future UK Status Essentially, according to current models, boil down to three: Membership of the EEA (all obligations, limited influence) EFTA-type association (some obligations, no influence) Third Country status (no obligations, no influence) Can construct various permutations of the above (next table) None of the above? Emphasis seems to be on a “tailor-made” solution for the UK Table 1: The “Hard” to “Soft” Brexit Range