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London (MNI) - The Bank of England sought to get the ball rolling
on authorisation of overseas banks and insurers post-Brexit, stating
that they can apply for authorisation from January next year.
Firms have repeatedly said time is fast running out before they
have to trigger contingency plans and the BOE's move is a pitch to try
and ensure overseas financial service firms will register to carry on
business here once the UK leaves the EU.
With the negotiations with the EU over Brexit ongoing, financial
sector firms have no legal certainty but the BOE said that they could
plan on the basis that there will be cooperation between EU and UK
regulators and regulatory equivalence.
There was an agreement this month between the UK and the EU on the
need to negotiate an implementation period during which firms could
carry on cross-border activities.
BOE Deputy Governor Sam Woods said in letter to financial sector
firms' CEO's that "We ... expect those negotations to progress early in
the New Year. In the meantime, firms may submit applications for
authorisation from January, and we will then review timelines and
assumptions as the political process moves forward."
The clear message is that the BOE and its regulatory arm, the
Prudential Regulation Authority, want to get the authorisation process
moving despite the uncertainty over the final shape of any deal between
the UK and the EU. Around 200 firms could apply for authorisation.
The PRA's approach to authorisation is based in part on the
assumption that there will be regulatory equivalence between the UK and
"It is ... premature for the PRA to reach a final view in these
areas ... However, given progress to date in the Brexit negotiations,
for the present firms may plan on the assumption that these requirements
will be met," Woods said.