PIMFA – the UK’s leading trade association for the personal investment management and financial advice sector – welcomes the Prime Minister’s clarification in her Mansion House speech on 2 March of key aspects of the Government’s aspirations for the post-Brexit UK/EU relationship
We support in particular her commitment to a broader and deeper bespoke agreement than has previously been achieved and the inclusion within this of financial services. We have highlighted the importance of maintaining access to EU markets, funds, talent, and clients for our member firms and of keeping close links with our EU partners.
We continue to emphasise that clarity of design and intention are vital for medium and long-term business planning by firms. Certainty about the future political and economic framework within which they will operate, including the roles of and relationships between specific institutions, encourages investment which will benefit retail clients by increasing service efficiency and keeping investment costs down. This helps the maintenance of business continuity, minimises shocks, and assists the mitigation of any consumer detriment inherent in the Brexit process.
To achieve this ideal minimal disruption model it is essential to allow for a transition period in which law and regulation in UK financial services remain as close to the status quo as possible, and which has a flexible end-date determined by when the final UK/EU agreement is completed. An artificially tight scenario with arbitrarily chosen early termination will not allow a proper post-Brexit agreement to be negotiated and brought into effect in an orderly manner, which itself will generate avoidable and debilitating uncertainty.
The management of possible legal and regulatory divergence in financial services in the post-Brexit era must be carefully undertaken and we welcome the Prime Minister’s statements of intent in this respect. The UK and EU will have the same sets of laws and regulations at the point of departure so binding commitments made at that time will be meaningful and beneficial, especially in highly regulated sectors such as financial services. Ongoing close consultation with our EU partners at all levels, from Government and Regulators through collective groupings such as associations down to individual firms, will be essential to the quality of this management process and we welcome the PM’s comments supporting this
PIMFA Deputy CEO John Barrass commented that: “It is essential for flexibility to be built into the timing of the end of transition so that a bespoke EU/UK agreement, with proper and agreed divergence management, can be negotiated to the advantage of all. To do otherwise could be detrimental to the quality of what is being agreed and have an adverse effect on businesses and citizens in both the UK and elsewhere in the EU.”