Some of the world's biggest financial players are more worried about what would happen if the UK lost passporting rights than immigration rights, research out today has found.
Over two-thirds (68 per cent) of the global institutional investors with assets under management of at least $10 trillion (£8.1 trillion) which were surveyed by FTI Consulting said they were concerned UK-based financial services firms may no longer have a passport to access the EU market following Brexit, but less than half (47 per cent) were worried about what restrictions might be placed on immigration between the EU and UK.
Firms were more concerned about losing passports for financial services, despite less believing that it would actually happen. While four out of five (80 per cent) of those asked believed it was likely restrictions would be put on immigration as the UK left the EU, only half (52 per cent) thought passporting rights would be lost.
"Investors believe restrictions on immigration between the EU and UK is inevitable, but they're more divided on whether this is a concern," said Dan Healy, managing director at FTI Consulting. "However, what's particularly concerning them is whether financial institutions will have access to the EU via a financial passport. The likelihood of this being available is dividing their opinion."
Institutional investors also already have their eye on trade deals with other nations, with 72 per cent believing the UK will have signed such a deal with Canada within a year of departing from the EU and 70 per cent thinking the same about Australia.
According to recently released figures from the Financial Conduct Authority, 5,476 UK-based firms use passporting to access markets throughout the European Economic Area, while 8,008 firms use the rights to access the UK market from other EEA states.
|What is passporting?|
|Passporting allows financial services firms which are authorised in the UK to operate throughout the European Economic Area, and vice versa. Without the rights, these firms would not be able to operate in other countries in the same way they do today.
According to Financial Conduct Authority figures, there are 13,484 firms in total which use passporting, of which 5,476 are based in the UK.
A number of banks and other companies are concerned these rights won't be secured in the Brexit deal so they'll need to find other solutions in keep servicing their clients.