Companies that sell to, buy from, or operate in the United Kingdom or the European Union, or are engaged in their financial or stock markets, are likely to be affected by the United Kingdom’s decision to leave the European Union. The specific impact of this, the Brexit decision, will differ by sector, with the financial services sector being one of the most affected. Financial services firms continued access to the EU Single Market post-Brexit is uncertain, and good risk management requires an analysis of the options, including some form of relocation. In this article we look at the likely considerations for financial services businesses such as relocation, financial services regulatory, people
advisory and employment law aspects.
The UK is about to begin an unprecedented period of change, creating unique challenges and opportunities. The consequences of Brexit will require planning and communication from companies who wish to prepare for Brexit by relocating their businesses into any EU27 location.
In this context, businesses need to prepare and execute a relocation strategy that considers the preferred location for the move, the anticipated costs, the retention and relocation of talent and minimal business disruption.
The employment law issues to be considered by any financial services company looking to relocate some or all of its business to an EU27 state are considerable. With respect to staff transfers, the position is complicated as any financial services business is likely to have a mixture of UK and EU27 nationals that it wishes to relocate. How can a company arrange the following issues with as little disruption as possible?
Regulatory issues in relocation. Most financial services organizations are preparing contingency plans based upon a hard Brexit scenario, where financial service passporting rights are lost. As such the starting point is to determine which services and products will be prohibited without an EU passport.
Given uncertainties around the regulation of cross border services and the general political dynamic, this is a difficult question. We are finding that, depending upon the organization and service provided, the optimum solutions are likely to vary. There also remains a great deal of legal uncertainty over how some of the cross-border concepts considered below will operate in practice in a post-Brexit world.
To read more, this piece was originally published on ey.com
EY Legal Services Contact:
Paula Hogéus – Global Labor and Employment Law Leader
Florence Esmoingt – Partner People Advisory Service FSO
James Gee – Associate Partner – FSO UK
Pav Younis – Law Brexit Team Leader