Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, whether existing contracts that underpin cross-border financial transactions within the EU of financial institutions based in the UK will continue to be valid when the UK has left the EU.

The Government continues to work with the Bank of England and Financial Conduct Authority to assess how the UK’s exit from the EU could impact financial services firms, and is alive to the risk that the UK’s withdrawal could in some cases create legal uncertainties regarding the status of existing cross-border financial services contracts.

As noted in the record of its meeting on 20 September 2017, these and other issues that the Financial Policy Committee (FPC) have identified pose risks to the provision of financial services in both the European Union and the United Kingdom. The FPC also highlighted in its June Financial Stability Report the risk of market fragmentation as the UK leaves the EU, which could result in higher costs and greater risks for both EU and UK companies and households.

There is a shared interest for both the UK and the EU in ensuring that we avoid outcomes that impose unnecessary costs and disruption to UK and EU individuals and businesses as the UK leaves the EU.