The result of the UK EU referendum has generated significant uncertainty and this is felt particularly acutely in the financial services sector. On Tuesday, the new Chancellor of the Exchequer, Phil Hammond, addressed the British Bankers’ Association highlighting the importance of retaining of passporting rights.
Under the passporting regime firms in the UK can use their UK authorisation to provide a range of investment, banking, insurance and related services across the EU. This can be done on a cross-border basis or by establishing a branch in other member states.
Many non-EU financial services institutions have established authorised businesses in the UK to benefit from these passporting rights.
Passporting does of course operate not just for the benefit of the UK. Financial businesses in the rest of the EU benefit from access to the UK financial services sector which is of significant size and strength.