In the wider political context, a number of ‘ok so now what’ possibilities remain, including:
- Graham Brady receiving a number of letters trying to oust the Prime Minister
- renegotiation of the Brexit Deal
- a second referendum
- a hard no-deal Brexit
In terms of the impact a no-deal Brexit on financial services, the industry-wide consensus is that EU clients will only be able to transact with EU firms. In future, any regulated activity connected to existing transactions would potentially need to be novated to an EU firm.
Meanwhile, over on the continent there is another Parliamentary vote quietly going through the motions – an amendment to the German Banking Act that is being lined up to go through the Bundestag in February.
This amendment would give BaFin discretion to allow UK firms to continue to provide cross-border services until the end of 2020, to avoid any harm to the functionality or stability of financial markets.
The good news is that if this does pass through the Bundestag, it will be separate and distinct from any transitional period or deal the UK agrees with the EU.
The bad new is that February is a bit late for such a confirmation – and there are a lot more EEA jurisdictions to worry about.