British Prime Minister Theresa May told The Sunday Times this weekend that she would introduce a bill to repeal the 1972 European Communities Act, the legislation which allowed the United Kingdom to enter the European Union. What will apparently be known as the ‘Great Repeal Bill’ will be introduced in the next Queen’s Speech, which is expected in April or May 2017.
However before that speech, May is targeting the end of March as when the UK government will trigger Article 50 of the European Union’s Lisbon Treaty, which formally begins the process that will pave the way for Britain’s exit from the EU.
The Article 50 rules gives both sides (the UK, and the EU) up to two years to negotiate terms of the ‘Brexit’ – meaning that unless negotiations are concluded faster than planned, March 2019 is the likely date of the real Brexit occurring.
Quite a number of Brexit skeptics (and those who hope that it will all somehow be undone) are voicing opinions that negotiating complicated terms with what amounts to twenty something other countries is simply impossible in two years’ time. Especially when some of the larger key EU bloc nations – namely Germany, France and the Netherlands – are facing national elections in that time span.
One of the key items to be negotiated between the UK and the EU is mutual recognition of financial regulation and licenses. If that is fully repealed, then UK based FCA regulated brokers will no longer be able to offer services to EU-based clients, without a separate license from one of the EU countries. Similarly, EU-based brokers will not be able to have UK offices or take on UK clients without a separate FCA license.
In the meantime, there seems to be a continued air of uncertainty in London financial circles as to what exactly Brexit will mean for London’s leading market position in banking, trading and finance.