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Sep 19, 2016

Brexit: A Financial Free Zone Within the City

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The UK Government recently indicated that it intends to negotiate a unique EU-UK relationship post-Brexit. It is hoped that the arrangements will be appropriate for the UK and London’s position as a leading international financial centre. A number of existing models have been discussed and will no doubt be analysed, with variations, by the Government. This client note sets out a framework for new opportunities which could be developed in the UK post-Brexit, by establishing a “financial free zone” in London. This would enable the UK to take a bifurcated approach to financial services post-Brexit. The UK as a whole could take an equivalence-based approach or other route to financial services regulation enabling single market access such that financial institutions could continue to provide services cross-border into the EU in a similar way to the present. Separately, the financial free zone could adopt a far more free-market approach to regulation within the zone, subject to tight controls on systemic risk. This would provide optionality to market participants as to whether they wish to do business cross-border at all. We discuss the characteristics and purpose of financial free zones and a proposed framework for the establishment of a London zone.

View full memo, Brexit: A Financial Free Zone Within the City

Authors and Contributors

Barnabas Reynolds

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5528

+44 20 7655 5528

London

Thomas Donegan

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5566

+44 20 7655 5566

London

Ellerina Teo

Senior Associate

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5070

+44 20 7655 5070

London

Oliver Linch

Associate

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5715

+44 20 7655 5715

London

Wilf Odgers

Associate

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5060

+44 20 7655 5060

London

Sandy Collins

Professional Support Lawyer

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5601

+44 20 7655 5601

London

Claire Hunter

Associate

Project Development & Finance

+44 20 7655 5059

+44 20 7655 5059

London