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05 July 2016

City AM: Post-Brexit passporting questions hang over fintech too

The question of passporting hangs over fintech startups as well as banking in a post-Brexit world.

A snap survey of around 100 members of industry body Innovate Finance following the referendum result found half are authorised to use the scheme traditionally used by banks and which allows them both to operate across the European Union.

Passporting has been cited as one of the main issues for banks in the wake of the vote for Brexit. It's estimated to be worth £10bn to the City and newly installed Mayor of London Sadiq Khan has vowed to fight for access to the Single Market and the passporting provided for the finance industry.

However, negotiating access to the market and agreeing on freedom of movement with Europe will be tricky. President of the European Commission Jean-Claude Juncker today reiterated leaders' hard line stance, saying there would be "no Single Market a la carte".

It's not just banks that rely on passporting, however, and fintech firms fear its loss along with access to the Single Market could force them to leave London and relocate elsewhere in the EU.

And in light of the vote to leave, the majority of firms surveyed said they are considering relocating or expanding primarily outside the UK.

Firms largely disagreed or were neutral about the potential opportunities of Brexit such as better tax arrangements, a greater focus on attracting highly skilled labour, and the ability to negotiate favourable trade deals, the survey found.

Full article on City AM

© City A.M.

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