Since the Leave vote in the June 2016 referendum, the UK government has emphasized that Brexit means Brexit, and the United Kingdom is determined to leave the European Union. The future of the UK-EU relationship is now engulfed in uncertainty and speculation. This uncertainty is most conspicuous with respect to financial services, a highly integrated industry that remains crucial to the economic well-being of both jurisdictions.

This paper examines the three primary scenarios that may govern future relations between the United Kingdom and the European Union in the realm of financial services: EEA membership, third-country equivalence and a bespoke agreement. In addition to examining the opportunities, challenges and feasibility of each option, the paper reflects upon outstanding transition issues. The paper posits that it is in both parties’ interest to find a workable solution that could help maintain valuable elements of the Single Market, such as passporting. However, it also warns that the United Kingdom’s Brexit vision, as it currently stands, is founded on unrealistic and irreconcilable objectives, which risks driving the United Kingdom’s economy of the cliff.

Brexit: The International Legal Implications is a series examining the political, economic, social and legal storm that was unleashed by the United Kingdom’s June 2016 referendum and the government’s response to it. After decades of strengthening European integration and independence, the giving of notice under article 50 of the Treaty on European Union forces the UK government and the European Union to address the complex challenge of unravelling the many threads that bind them, and to chart a new course of separation and autonomy. Brexit necessitates a deep understanding of its international law implications on both sides of the English Channel, in order to chart the stormy seas of negotiating and advancing beyond separation. The paper series features international law practitioners and academics from the United Kingdom, Canada, the United States and Europe, explaining the challenges that need to be addressed in the diverse fields of trade, financial services, insolvency, intellectual property, environment and human rights.