By Nick Carey
CHICAGO (Reuters) – Britain’s financial services sector is working hard behind the scenes to communicate with Brussels and the UK government to ensure they don’t lose “passporting” rights within the European Union following Britain’s vote last month to leave the trading bloc, the Lord Mayor of the City of London said on Friday.
“I think we’re determined that we won’t,” lose passporting rights, Lord Jeffrey Mountevans, who serves as an ambassador and representative for the UK financial services industry, told reporters during a visit to Chicago. “Clearly we want to stay within the single market. It’s in everybody’s interests to find a good way forward.”
Passporting is considered the most significant feature of the EU single market for banks and other financial companies, allowing firms in one EU country to provide services to clients elsewhere in the single market.
It is particularly useful for U.S. banks doing business in Europe, some of which are looking at alternative locations to London should Britain leave the EU.
After its historic June 23 referendum resulted in a vote to leave the EU, Britain will have to negotiate on financial passporting as part of the terms of its exit from the EU. It will have two years to do so once it triggers Article 50 of the EU Treaty. Article 50 has not yet been activated by Britain and it may be months before that happens, assuming it ever does.
“We want to inform the government thoroughly as to the requirements of the City and financial and business services so they’re very well prepared going into the discussions,” on leaving the EU, Mountevans said. “That’s a key message for us and to make a plea for calm.”
“It’s very clear this is necessary and very important for the EU as well, there is a massive mutuality of interests,” he added.
Mountevans spoke to reporters at the offices of the U.S. unit of Legal & General Group Plc. The British life insurance, pensions and investments giant manages assets of around $1.1 trillion around the world.
Robert Moore, chief executive of Legal & General’s U.S. unit, which manages assets of around $130 billion, said that uncertainty over the UK’s future will provide “added noise” for investors amid a contentious U.S. presidential election scheduled for Nov. 8.
He said that uncertainty would likely lead to more speculation and turmoil in the coming months while Britain’s Conservative Party chooses a new prime minister.
“At the margin you get and will continue to get those who are speculative,” Moore said. “We’ve seen that in the past week and we’ll continue to see some evidence of that.”
(Reporting By Nick Carey; Editing by Bill Rigby)