Question to the HM Treasury:

To ask Her Majesty's Government what progress they have made in safeguarding the legality of (1) cross-border derivative, and (2) insurance, contracts after Brexit.

The Financial Policy Committee (FPC) is responsible for reviewing risks to the UK’s financial stability associated with its exit from the EU, including legal uncertainties concerning existing cross-border financial services contracts sold under passporting arrangements. This affects both UK and EU financial services firms and their customers.

The UK and EU have reached a hugely important milestone in the Brexit process by agreeing the terms of a time-limited implementation period. During the implementation period, access to one another’s markets will remain unchanged and on the current terms. This will allow citizens and businesses in the UK and across the EU to plan with confidence on the basis that businesses can operate as now throughout the implementation period.

The UK government has also been clear that, per its 20 December 2017 announcement, it will legislate, if necessary, to ensure that financial services firms’ contractual obligations can continue to be met, mitigating the potential impact of withdrawal on EU firms’ existing contracts in the UK.

There is a shared interest for both the UK and the EU to ensure that we avoid outcomes that impose unnecessary costs and disruption on individuals and businesses as the UK leaves the EU. It is vitally important that we work with our European partners to put the technical arrangements in place to avoid financial market disruption.