The UK left the European Union on the 31st of January in 2020. This process is known as Brexit.
After Brexit, the UK will adopt some less bureaucratic rules. It will start with simple regulations of small banks. When the Brexit translation will expire, the UK will reveal new legislation for regulating the city of London. After leaving the European Union, the UK’s hopes of “Brexit divided” regulation arose. They are streaming to be a financial center, but after Brexit, they will lose access to the 27 countries, who are also their biggest customers. And all of this is happening while they are fighting with the pandemic.
As for now, the UK is on a transition period, which means that it is basically the time for implementation. It will end in December 2020. This means that before that, the UK needs to follow EU rules. In January the new relationship with the EU will begin. This will also change the financial services.
The current situation in the UK creates big uncertainty for the banking and financial services industry. Why? Well, Banks and financial institutions are opening up. They have faced a period of volatility and weakness. Every company in the UK has a bank account, but not all of them are within the UK itself. The UK companies can accept foreign clients but they will need to have to open specific bank accounts for them. This will facilitate the transactions but it is hard work.
Setting up a new business bank account for a non-resident may be complicated. It is possible but it needs some time and works to be done. There are no legal restrictions from the banks in the UK for the foreigners who would like to have their businesses in the UK and have their business accounts, but the UK’s anti-money laundering policy will make the whole process very long and sometimes unbearable. For example, there is this Forex trading account type called aggregate bank account, which means the FX broker opens a bank account for you when you deposit with them. In Cyprus, the banks follow all the EU laws meaning that anybody from the EU could potentially have that account opened. In the UK it might be different already.
The UK is Still Struggling with Brexit Negotiations
While many politicians promised that Brexit will be easy to overcome, the reality is different. The UK’s reality of leaving the EU is creating ongoing problems. The uncertainty caused by Brexit will impact every industry in the UK. Financial markets are already struggling to understand the new reality. The forex brokers are already affected by it. In the long term, UK trade will be optimized outside the EU and will value more, but before that, it will cause market fluctuation in the GBP. UK’s international earners will gain some profits, while inside stocks will fall. The regulations will be needed, and people will go to the biggest financial regulations for that. For example, in England it’s FCA and for others in Europe its CySEC. What’s the difference between CySEC and FCA? Well, both are trustworthy regulations for traders when choosing their brokers. They are always improving their conditions in order to provide their customers with a high-quality service environment and protect them with all costs.
The EU is Demanding the Plan
The UK published a bill which is rewritten to answer the requirements of the agreement signed in January. The EU’s trust is already pretty damaged and they won’t be able to build some of it again with the UK. The government says that the latest trades within the UK and EU is wrapped up in London.