The EU Withdrawal Bill raises "major issues" for the financial services sector, a group of Lords have been warned - and the problems will start from day one.
Cambridge professor Eilis Ferran and LSE professor Niamh Moloney told the EU Financial Affairs sub-committee this morning that the government's plan to convert all European Union laws into the UK would cause "legal uncertainty" for those working in the financial services sector.
The bill would give the powers to "correct deficiencies" in EU law, which means equivalence could not be relied on. "We will already be doing surgery on the body of EU law, so we're not going to match on exit day," Ferran said.
"The idea that it will be easy, at least at the beginning, doesn't seem quite right."
But those scrutinising the bill from Brussels would need "reassurance that the system will stay the same", she added.
Exactly what was meant by "exit day" was still not clear, Ferran claimed, and if there was a staggered start to full withdrawal that would be "problematic", she added.
Similarly there was confusion over non-binding legal guidance which she said was a vital "part of the ecosystem that informs" the sector.
Moloney noted the level of investment the EU had put into the technology of financial regulation, saying it was "hard to see the EU giving that template up for a customised relationship with the UK... they are uncomfortable building customised relationships."
But she added this would present some opportunities for improvements within the UK's financial services sector.
In the "wider scheme" it was no bad thing to have "a slightly more frictioned relationship" with the "monolith" EU.
"Disruption is not necessarily a bad thing in financial services," she said, suggesting it would make the sector more efficient in the longer term.
The City is still eagerly awaiting a position paper from the Department for Exiting the European Union (DexEU), to understand where the government stands on protecting the future of the financial services after Brexit.
It had been hoped the paper would be published back in August, but is now expected to be late September at the earliest.