FinTech Brexit impact tool
18 August 2016
Industries: Financial Institutions, FinTech
Services: Financial Services
Brexit: What does this mean for UK FinTech?
Since the referendum on the 23 June returned a majority vote to leave the EU, there has been a huge amount of speculation about what that will mean for the UK’s Financial Services sector. The vote, of itself, does not have any legal effect so the UK’s regulatory regime will continue to match the rest of the EU, including complying with new regulations, until Brexit takes effect. Current expectations are that Brexit will not happen before the beginning of 2019.
Much of the discussion on the impact of Brexit on financial services has focused on the on-going ability of UK firms to take advantage of a cross-border regime and the possible loss of its current “passporting” rights. “Passporting” is often used as an umbrella term to mean the access rights which a business based in one country in the EU/EEA has to export financial services or products into another country in the EU/ EEA. The concern is that if the UK ceases to be in the EU/EEA it will lose the ability to use those access rights. Before Brexit happens, the UK will be seeking to negotiate an arrangement with the EU under which “passporting” rights, or something similar, continues to be available so the issue may be solved that way. If these negotiations are not successful, there are other options to consider.
However, whether a potential loss of passporting is even likely to be an issue for FinTech firms starting or scaling up in the UK depends on a number of issues such as whether your firm is currently regulated, whether your activities include exporting financial services or products to another EU/EEA country, and whether those activities are covered by a Directive which includes passporting rights.
Our FinTech Brexit impact tool has been designed to help you navigate those issues. The FinTech Brexit impact tool walks you through the questions you need ask about your business and sets out some initial actions you may want to take.
The FinTech Directives table in the tool helps you work out whether your business is covered by a European Directive and whether that Directive includes passporting. You can also use the FinTech Brexit impact tool to assess if these issues may impact your competitors, clients and regulated counterparties.
When using the FinTech Brexit impact tool it is necessary to know that the Directives that include passporting rights are referred to as “the Single Market Directives”. You can also refer to the FinTech Directives table to check whether your business conducts activities that might be covered by one of the Single Market Directives.