Brexit: European Banking Authority Again Warns Against Letter-Box Entities
10/08/2019The European Banking Authority has issued a further Communication on issues associated with the U.K.'s withdrawal from the EU, scheduled to take place on October 31, 2019. The EBA notes that financial institutions have made progress on their preparations for a no-deal Brexit. However, national regulators have highlighted concerns about the operationalization of relocation plans and customer communication. In particular, national regulators have noted that in some cases authorization has been obtained, but it remains unclear whether the firm has transferred assets, skilled staff and risk function to fully operationalize the new business. The EBA reminds firms of the principles it set out in its October 2017 Opinion on structures, and particularly the need for firms not to set up so-called "empty shells".
The EBA Communication also reminds firms that they need to communicate with their customers about the impact of Brexit on them, including any effect on a customer's contractual or statutory rights.
View the EBA's statement.
View details of the EBA's October 2017 Opinion.
View details of the EBA's June 2018 Opinion.
View details of the EBA's December 2018 Communication.
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