What do the EBA's SPoRs mean for BREXIT-proofing of business and for other market participants moving to the Eurozone?
On 12 October 2017, the EBA joined the other ESAs and released a legal instrument in the form of an 'Opinion' titled: "issues related to the departure of the United Kingdom from the European Union" (the EBA General Opinion). EU supervisors, as addressees of the Opinion as well as new applicants and existing supervised entities relocating must take account of the EBA's SPoRs, despite the Opinion being drafted as non-binding, as there will be no automatic grandfathering of existing establishments and there is as yet no indication that the UK will be able to obtain a transition agreement to extend its EU Single Market access/rights beyond its departure from the EU in March 2019 and when entities in the UK will, from an EU regulatory perspective, become third-country entities.
This Client Alert, which is part of a series covering the SPoRs published by the other ESAs, highlights the practical impacts of the SPoRs in the EBA General Opinion as well as differences to those issued by other ESAs and similar statements from the European Central Bank (ECB) acting in its role in the Single Supervisory Mechanism (SSM). The ECB-SSM' and the ESAs' statements, FAQs and supervisory guidance, which are often framed as non-binding, do read like rules and the SPoRs are certainly clear on the intended outcomes. Those publications have been echoed by similar measures taken by national competent authorities (NCAs) in the EU. This is relevant as the NCAs are the direct addressees of the respective ESA Opinions and are thus tasked with implementing the SPoRs in their supervisory activities.