LONDON (AP) — The Bank of England has advised European financial firms working in the U.K. to plan to operate as they do now for a period after Brexit in a little more than a year’s time.
In a statement Wednesday, the bank welcomed last week’s agreement between the British government and the remaining 27 members of the European Union for a transition period after Brexit until the end of 2020.
Under the transition period, which will come into force if the two sides agree on a withdrawal agreement, Britain will remain in the tariff-free single market and customs union even though it will be out of the EU’s decision-making structures.
Bank of England officials, notably Governor Mark Carney, were urging the government to swiftly agree on the outlines of a transition period in order to stop many financial firms from relocating out of the U.K. and into the EU.
The Bank of England said it has “made clear to relevant firms that they may plan on the assumption that U.K. authorization or recognition will only be needed by the end of the implementation period.”
Currently, financial firms across the EU operate under so-called “passporting” rights and other common EU rules, which give certainty to those wishing to operate outside their home country.