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STUDY: May Govt to Hand EU Financial Firms Brexit Advantage

British Prime Minster Theresa May arrives at the Council of the European Union on the final day of the European Council leaders' summit on March 23, 2018 in Brussels, Belgium.
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Theresa May’s government is set to make it easier for European Union (EU) firms to access UK financial markets than it will be for UK firms to access European markets, experts say.

The revelation, from a study by a leading law firm, comes as leaked government papers show Mrs May will also allow all EU migrants to stay in the UK after a ‘no deal’ Brexit, even if the bloc kicks out Brits and refused to agree on a post-Brexit deal.

European law firm Fieldfisher say the government’s ‘no-deal’ planning for financial services will allow EU firms to operate in the UK without a post-Brexit agreement.

They called suggestions that European firms won’t be gifted access to UK markets for financial services unfounded.

The study reads: “Combined with other exclusions, and given certain activities may not be seen as being carried out in the UK at all, many firms could find that the scope of UK authorisation they require in a no-deal scenario is significantly narrower than the scope of their current passport, or is not required at all.

“Indeed a significant volume of business currently carried out in the UK by EU27 firms under the passport can be carried out without falling within the scope of UK authorisation.”

Azad Ali, a financial services regulatory partner at the firm, told the Express the “accommodating nature of the UK regulatory regime with regard to overseas firms goes a long way to mitigating the cliff-edge impact of a no-deal” for European businesses.

He added: “It is clear that the Government is making every effort to ensure that European financial services firms can continue conducting business as usual in the UK after Brexit.

“The temporary licensing regimes are helpful, but nonetheless introduce additional regulatory friction and are, by nature, transitional.

“Many EU27 firms will not have to rely on the temporary permissions regime in the first place, if they can instead tailor their operations to rely on one of the exclusions from UK financial regulation, such as the overseas person exclusion.

“The relatively accommodating nature of the UK regulatory regime with regard to overseas firms goes a long way to mitigating the cliff-edge impact of a no-deal for such firms.”

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