Post-Brexit referendum commentary has been, on balance, negative, anticipating disaster for the UK financial community, particularly for banks and investment banks in the City but also for fund managers and others. This is neither constructive nor the inevitable impact of Brexit on the City. The current legal underpinnings for the City are in fact likely either to continue, or to be replaced by a system which achieves quite similar outcomes.
The implications for the City hinge on the future of the so-called ‘services passport’, which allows institutions licensed in one EU member state to provide cross-border services into another EU member state without establishing a presence in that state. A firm exercising passport rights does not need additional regulatory approvals in the EU and is regulated only by its home member state regulators.
