The Personal Investment Management & Financial Advice Association (PIMFA) has had a lot to say about the Brexit process in recent months – the UK’s impending exit from the EU is, after all, one of the major issues affecting the financial services industry and the wider economy.
In its latest press release, issued on June 14 2018, PIMFA says that “a ‘hard’ or ‘no deal’ Brexit would bring abrupt change and disruption to business flows and relationships that should be avoided.”
Instead, the financial advisers’ and wealth management trade body is calling for a “one-step Brexit”. Under its preferred model, the UK would enter into a transitional period of at least two years upon formally exiting the EU in March 2019. However, the nature of the final agreement between the UK and the EU would also be known in advance, giving firms the chance to plan for the post-Brexit market.
“There would in this scenario be only one major change, suitably far from the recent MiFID and other legislative changes to allow firms to have finalised those adjustments and amortise their costs. This would help to make further change manageable at low cost to clients. It would also generate greater market certainty and reduce volatility, thus mitigating the risk of adverse consequences of change for retail clients.”
In his annual Mansion House speech, delivered on June 21, Chancellor of the Exchequer Philip Hammond MP commented on the importance of securing a favourable deal with the EU, when he commented:
“The immediate key to maintaining Britain’s leadership in innovation and strengthening London’s position as the world’s leading international financial services centre is ensuring we get a good Brexit deal and that we protect markets from uncertainty during the transition.”
Politicians on both sides have already ruled out the continuation of the passporting regime, where a firm authorised in one EU member state is automatically authorised to trade in the other member states, without requiring separate authorisation from the other national regulators. One of the main reasons why it is felt that this arrangement cannot continue post-Brexit is that the UK will then be under no obligation to accept regulatory changes that are driven by the EU’s supervisory authorities.
However, Mr Hammond still spoke of his wish that the UK and EU financial markets would “remain highly aligned and deeply interconnected.”
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