Brexit will become a reality when the UK leaves the EU on 29 March 2019. This will change conditions for cross-border trade in financial services to and from the UK. FI describes in this report its analysis of a number of significant economic and legal aspects related to Brexit.
In order to streamline its analysis, FI assumes a scenario in which the UK leaves the EU without the future relationship between them clearly defined and the UK becomes a third country among others (a hard Brexit).
When the UK leaves the EU, British financial firms will become third country companies. They may continue to conduct business in Sweden through subsidiaries or branches that are domiciled either in Sweden or another country within the EEA. Due to the narrow EU regulations regarding equivalence, British firms will only be able to conduct very limited business directly from the UK. The extent to which Swedish firms can conduct business in the UK will be dependent on British rules, but there are strong indications that it will be possible to do so through subsidiaries or branches.
The supply of financial services is expected to largely remain the same for Swedish households and firms since British firms have announced that they will apply for authorisation within the EU to be able to continue to conduct business. There are also opportunities to find equivalent alternatives. The British firms also have only a small number of retail customers in Sweden.
FI makes the assessment that Brexit will not affect consumer protection. One possible exception is related to contract continuity, where primarily in the insurance sector contracts with consumers can be affected.