An update from Schroders on Brexit

The UK left the European Union (EU) on 31 January 2020 and entered a ‘transition period’ while the UK Government negotiated its future relationship with the EU. On 24 December 2020, both parties announced that they had reached agreement on a free trade agreement, the UK-EU Trade and Cooperation Agreement, with its terms taking effect immediately after the transition period concluded on 31 December 2020. As widely anticipated, the trade agreement does not make provision for financial services firms in the UK to continue to access the EU single market and, as a result, those firms lost their passporting rights.

Schroders was well positioned for such a no deal scenario for financial services. Our diversified business model and significant presence in the EU means that we have been well placed to respond to any challenges arising without making significant changes to our operating models. We had obtained additional investment management permissions in Luxembourg to ensure that we can continue to offer the full range of investment services to all our clients. We had made a few structural changes to enable us to continue to manage our clients’ assets regardless of their geographic location. Our aim throughout has been to ensure that our clients receive a seamless service.

We will continue to closely monitor future negotiations and regulatory developments with respect to financial services, including any frameworks for regulatory cooperation between the UK and the EU that might affect our business and our clients.

We have registered our Luxembourg fund ranges under the UK Financial Conduct Authority’s temporary permissions regime to allow our EU based funds to continue to be offered to clients based in the UK for the foreseeable future.