You are here

Almost 5,500 UK-based firms use European passporting: regulator

Wednesday, September 21, 2016 - 22:04
28_38895676 - 29_06_2016 - BELGIUM-EU-POLITICS-BREXIT-BRITAIN.jpg
The 'passport' rights allowing 5,500 British-based financial firms to operate freely across the European single market are at stake, the country's financial watchdog has revealed in highlighting potential fallout from Brexit.

[LONDON] The 'passport' rights allowing 5,500 British-based financial firms to operate freely across the European single market are at stake, the country's financial watchdog has revealed in highlighting potential fallout from Brexit.

Some 8,000 financial firms based elsewhere in the European Union also do business in Britain via passporting, and their rights are likewise threatened, data from the Financial Conduct Authority (FCA) regulator showed.

The passport scheme allows companies to do business across the 28-nation European Union - and the 31-strong European Economic Area which includes Iceland, Liechtenstein and Norway.

In the run-up to Britain's EU exit referendum in June, major players in the City of London finance district warned about the impact of possible departure from the EU single market - and the loss of passporting.

The future of those rights is uncertain ahead of the expected start of Brexit negotiations next year to draw up a formal new trade deal with the EU.

"These figures give us an initial idea of the effects of losing full access to the single market in financial services," said lawmaker Andrew Tyrie, who heads parliament's Treasury Select Committee (TSC).

"The business put at risk could be significant."

The FCA figures were published in a submission to the influential committee on Tuesday.

Britain's Boris Johnson - a vocal Brexit supporter who is now foreign secretary - declared in July that he expected the country to retain passporting rights.

However, Germany's central bank chief Jens Weidmann said Monday that British banks would risk losing their automatic right to trade in EU states when the country leaves the bloc.

"Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area," Mr Weidman said in comments to various media.

AFP