Brexit: as the dust settles, some practical points

We have a new Prime Minister, complete with Cabinet, but the road to Brexit is no clearer.  We don’t know the timeline, what the UK will ask for or what the EU (and each of its remaining member states) will be prepared to give.  But here are some practical points to consider at this stage.

1          For anyone with employees or consultants from other EU member states, an initial gap analysis should be carried out now.  Go to immigration lawyers for advice, but an excellent briefing last week by Laura Devine Solicitors highlighted the need for people to get on the Home Office’s radar now and start to evidence how long they’ve worked in the UK.  As a firm, are you going to help staff through this process and co-ordinate that?  What will happen if family members of your staff can’t remain in the UK?  What if you lose employees or consultants, because they choose to return to their home member state or because they have to leave?  What should your recruitment policy be going forward and how will that sit with employment law requirements?

2          Consider the potential impact on customers – specific customers or customer segments.  How will your customer be affected if the UK economy falls into recession?  To what extent are customers dependent on business with other EU member states or will they be adversely affect by currency fluctuations?  What should you be thinking through – and doing – now to prepare for any customer impact and to help customers?

3          Consider the potential impact on strategy and the business.  There are the obvious points around location of head and regional offices and what international expansion is feasible at this stage.  There are also points around customer perception – are customers satisfied that you’ll be able to meet their requirements in the future?  If customers are adversely affected by Brexit (in the short or longer term), what impact might that have on your business and how should you respond to that?  If interest rates fall further, what effect would that have on your net interest margin and how would that affect your business model?

4          Carry out a risk assessment.  This might conclude, quite quickly, that there are few (if any) risks to manage, but it’s in place and can be updated once the Brexit after-shocks become more apparent.

5          For UK branches of banks established in other EU member states, passporting is the key issue.  So much follows from whether that will be available and, if so, on what terms – authorisation and any grandfathering; application of capital and liquidity requirements; resolution planning; whether the current corporate structure will need to be altered; the nature and extent of regulatory oversight in each relevant jurisdiction; regimes affecting individuals.

6          Brexit working groups – establish them, but acknowledge that there’s a limit to what can be done at this stage.  The work will come later.

 

The blog and all entries on it are intended to provide general information about recent and expected items that might be of interest.  Neither the blog nor any entry provides or constitutes, or purports to provide or constitute, advice relevant to any particular circumstances.  Legal or other professional advice relevant to any particular circumstances should always be sought.

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