Financial services sector plans for no-deal relocations
Only 12% of financial services firms expect the UK will leave the EU with a deal agreed by the October deadline, while 42% say they will transfer UK business to a global centre outside the EU immediately if there is a no-deal exit, according to EY research
12 Aug 2019
The EY poll found 54% of firms believe a further extension is the most likely outcome on 31 October, with 34% expecting the UK to leave with no deal.
In the event of no deal, nearly half will move UK business to an alternative centre outside the EU, with New York and the US the most popular choice, cited by 13%, followed by Singapore (6%) and Hong Kong (3%).
The top three issues identified in the event of a no deal are contract continuity and jurisdictional controls, cited by 29%, followed by market volatility (20%) and capacity for heightened regulatory reporting (19%). Other issues were Immigration considerations for UK and EU workforce, mentioned by 11%, and data transfer (11%).
Respondents pointed out that only in limited areas has Europe-wide action been taken to mitigate risks to contract continuity and therefore disruption to client services, meaning they are reliant on a patchwork of policies in individual countries, and need to understand and put in place controls to accommodate each individual country’s requirements.
John Liver, financial services partner at EY, also highlighted the firm's warning about potential workforce issues post-Brexit.
He said: ‘Whilst immigration considerations feature in the list of top concerns, we were surprised this issue does not have higher profile.
‘Many firms are relying on people having roles in both the UK and their EU27 country and potential restrictions on the type of work that business travellers can do need to be considered carefully with red lines kicking in from day one across most of the EU27.’
Pat Sweet | 12-08-19