The U.K. government warned that businesses operating in the U.K. should plan for the possibility of the U.K. exiting the European Union without an agreement, according to a document published Tuesday outlining the implications of a no-deal Brexit.
Financial services firms could lose their permission to conduct cross-border business in the event of a no-deal exit, the government said alluding to an earlier communication from the European Commission that equivalence will not be available for U.K. firms under any EU legislation in a no-deal Brexit.
The government also called on businesses to prepare for a no-deal scenario. "Many U.K. businesses need to work with their EU partners to secure a legal basis for the continued transfer of data from the European Economic Area to the U.K.," the document said.
For financial services, the document, confirmed that the EU is putting contingencies in place that are only "temporary" and warned some "important gaps remain" in EU "no-deal" legislation, which is aimed at mitigating risks of disruption to certain financial services provided by U.K. firms in Europe.
However, the U.K. government said it is "unclear how comprehensive EU actions to mitigate certain risks" will be by March 29, when the U.K. formally exits the European Union."The commission has stated that it is only focusing on areas in its self-interest, for EU financial stability, and that any decisions taken may be conditional and time-limited," the document said.
The government also confirmed Wednesday that it intends to deliver a withdrawal agreement by March 29, the current Brexit deadline. U.K. Prime Minister Theresa May said the next meaningful vote on her amended withdrawal deal will be held by March 12.