One of the key questions firms need to consider in their Brexit planning is how to deal with cross-border financial services contracts. In a scenario where the UK leaves the Single Market and no deal covering financial services is agreed, firms will lose the right to passport financial services activities between the UK and EU27. This raises uncertainties and a potential cliff-edge risk for the continuity of existing cross-border contracts, which currently underpin many firms’ businesses.
Firms will need to consider whether and how these risks to contract continuity may be mitigated, or whether to move existing contracts to a locally-licensed entity, which may itself require a complex repapering exercise. This briefing highlights some practical implications for firms when considering these issues.