So with the departure of 2020 we welcomed in 2021 with hope and aspirations. Unfortunately, the trials of 2020 were quickly replayed with the announcement of the lockdown but nonetheless it is important to stay optimistic and confident that, as the year progresses, elements of normality will return to our daily lives.
What struck me over the transition period from old to new was the sparsity of information on the news about our complete exit from the European Union. Of course, there was coverage as to whether we would strike a deal or not, but given the BREXIT overload we faced prior to the pandemic the paucity of reporting seemed bizarre. It was with some relief therefore to see the headline of The Economist last week questioning “Britain’s place in the world”[1], referring to our new status outside the EU. As to be expected from that publication, the Leader examines the bigger picture, assessing how Britain will fare on the global stage now we’ve cut free from our European cousins. Although I was not in favour of the referendum outcome there is at least some intrigue in imagining what we can do now, where our hands were previously tied. The Economist article talks about British diplomats visiting countries unvisited for many years, seeking new deals and reigniting old relationships. However, the piece also reflects on the diminished share of Global GDP Britain represents and further, quoting Sir Simon Fraser, former diplomat “The next chapter of world affairs will be about the political, economic, regulatory, technological and military interplay between the US, China and Europe. The task for the UK is finding our place in this.”
So I get that strategically there are a lot of questions to be asked; some will be answered with opportunities, others with misfortune. What I am struggling with, however, is the detail. There was a point not that long ago and I was employed by a UK based asset management firm, when contingencies were being made about relocating portfolio managers to Ireland to ensure the continued management of investment accounts. There was a sense of urgency, bordering on panic, about whether we would be able to sell or manage UK based investment funds to European clients or conversely offer our European based range to UK clients. Now the deadline has passed, we are no longer in the EU, yet it would seem that we are still able to go about our business as we did previously. I consider myself a light-touch reviewer of the news, so if I have missed that particular memo about the new arrangements would someone please point me in the right direction?
Or perhaps that particular can has been kicked once again down the road? The EU-UK Trade and Cooperation Agreement[2] contains three short paragraphs on Financial Services, the third of which states: “The declaration reaffirms the integrity of our respective, autonomous equivalence frameworks. The Parties will discuss how we move forward on specific equivalence determinations. The Parties will codify the framework for regulatory cooperation in a Memorandum of Understanding.” Admittedly I am quoting from the summary document, although the actual declaration doesn’t provide much more detail – other than a date, March 2021, when the Memorandum of Understanding will be completed.
So I guess we have to wait some more. The mood music seems chilled, but let’s hope that continues and the plans to relocate to EU locations can be placed back on the shelves.
[1] The Economist, January 2nd -8th, 2021
[2]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948093/TCA_SUMMARY_PDF.pdf
