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Brexit Update 1st March 2021
Please read our updated Brexit information here.
The news last week was dominated by the Northern Ireland (NI) border discussions. A meeting of the EU-UK body overseeing the NI Brexit arrangements and aimed at resolving issues with the Irish sea border has had mixed reactions amongst NI politicians. No change was reported in extending the request by the UK to extend the border grace period, due to end in April. The UK and business groups have asked the EU for an extension until 2023.
The UK will be submitting a new operational plan for supermarkets and their suppliers and investment plans for digital solutions for trade. Another meeting of the committee will take place in March.
Financial services – EU firms setting up in the UK
In our last newsletter we reported that the EU had not yet granted the UK financial services industry “Equivalence”. Equivalence is a system which can be used to grant domestic market access to foreign firms in certain areas of financial services. It’s based on the principle that the countries where they are based have regimes which are ‘equivalent’ in outcome. The EU has not yet reached a decision regarding the UK and requires more information on what the UK will be doing in the future. As a result UK firms do not have access to EU customers and vice versa. So it is interesting to note that over 1,000 EU finance firms are looking to open UK offices to get access to the UK market. These include banks and insurance companies.
Financial services regulatory consultants Bovill report that 1,500 regulated EU firms have applied for temporary permissions to continue operating in the UK and around two thirds had no physical presence in the UK before Brexit. The highest number of applications came from companies in Ireland, France and Germany.
This report suggests London will remain a key global financial centre and this is welcome news for advisers, professional firms, other supporting businesses in the UK. See: https://www.bovill.com/ Our view is that regulatory equivalence decisions would benefit businesses on both sides of the channel, and we hope an agreement can be found sooner rather than later.