In March 2019, the UK is expected to become a third country for the purposes of the EU's legal framework and, in the event of the departure of the UK from the EU without a ratified withdrawal agreement, the UK will not benefit from rights under Union law, or be subject to its obligations. This has a number of implications for financial institutions of the 27 Member States that will remain in the EU (EU27), interacting with UK-based counterparties, clients or customers.
In June 2018, the European Banking Authority issued an opinion which highlights it's expectations relating to the engagement of competent authorities to ensure that financial institutions are preparing adequately for this situation, as well as meeting their obligations to their customers in these circumstances. Our most recent note summarises the EBA opinion but is specifically addressed to financial institutions that are currently present in the EU27 and that interact with counterparties, clients or customers based in the UK (whether directly or by establishment).
This note aims to assist financial institutions in their assessment as to whether they are adequately considering the risks and obligations entailed by the possible departure of the UK from the EU, and that they are putting in place appropriate plans to mitigate any risks in a suitable timeframe.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.