European Commission Publishes Notices to Financial Services Stakeholders on UK Withdrawal from EU
07/07/2020The European Commission has published a series of updated notices, including many addressed to firms operating in the financial services industry, on the actions that should be taken to prepare for the end of the transition period following the U.K.'s withdrawal from the EU on January 31, 2020. The transition period ends on December 31, 2020. The notices most relevant to the financial services industry relate to asset management, banking and payment services, credit ratings agencies, emissions trading systems and consumer protection and passenger rights. They update and replace the notices originally published in 2018.
The notices describe how EU rules will apply to entities offering services in the U.K. and EU in each of the above sectors from January 1, 2021, once the U.K.'s transition period expires. They also contain advice to stakeholders on the action they may wish to take in preparation for the U.K.'s exit. One noteworthy addition to the previous version of the Commission's notice to banking and payment services firms states that, following the end of the transition period, EU consumers will be entitled to maintain a bank account with a U.K.-authorized entity, subject to relevant U.K. requirements. If the bank account is held with a U.K.-authorized entity in the U.K., the U.K. deposit protection rules will apply. This new interpretation was presumably issued on the basis of the doctrine of "characteristic performance", which treats banking services as having been provided from the place of business of the branch where the account is held. Our firm has previously highlighted this exception in its thought leadership on Brexit, but which several leading law firms have discounted in theirs when arguing for UK banks to establish EU subsidiaries to service EU account holders.
View the Commission's notice to stakeholders in the field of asset management.
View the Commission's notice to stakeholders in the field of banking and payment services.
View the Commission's notice to stakeholders in the field of credit rating agencies.
View the Commission's notice to stakeholders in the field of EU emissions trading systems.
View the Commission's notice to stakeholders on EU consumer protection and passenger rights rules.
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