Reminder: what a hard Brexit will entail

The UK left the EU on 1 February 2020, upon which a transition period started. This period is currently set to end on 31 December 2020. During the transition period, more or less the same rules applied as when the UK was a member of the EU. Negotiations are underway to establish an agreement before the transition period ends. FI would like to highlight in brief here what will happen in the event that the transition period ends without an agreement between the EU and the UK.

Given this scenario, a so-called hard Brexit, the UK (including Gibraltar) will be considered a third country. This means that UK financial firms, which previously conducted business in Sweden as cross-border operations under EU law, will no longer have access to this possibility. However, UK firms will have the opportunity to conduct cross-border operations in Sweden if they meet the conditions that apply to firms from third countries.

The government has recently decided that firms from third countries that conduct securities business may continue to do so in relation to professional clients. This applies until the end of 2021 and only if the firm had a contractual agreement with these clients on 29 March 2019.

FI and the European supervisory authorities (EBA, EIOPA and ESMA) have provided information on several occasions over the past few years about what a hard Brexit would entail and encouraged firms under supervision to prepare for such a scenario. The European supervisory authorities and the European Commission introduced several measures in recent years to reduce the negative effects of a hard Brexit. FI refers to each authority's website, where information about these measures is published regularly.