Thread by @JHallHDI

Let’s be clear - the scuffle over fishing is a bagatelle compared to what’s not going on in financial services at the moment. #Brexit #NoDealBrexit - a thread 👇

https://twitter.com/FT/status/1319660106099941377

If you think our financial services industry is American Banks like @George_Osborne does then the City is OK - they all now have Dublin and Frankfurt offices and will be All Right Jack. If you care about the real City, of small firms, you should start to be really worried 2/13

A real example: an English client has an Irish DAC funding vehicle that is listed on the Cyprus Stock Exchange with English investors. Currently my firm is a member of the CSE and investors hold stock in CREST. From Jan 1st my membership of CSE is in real doubt. 3/13

Why do we use European markets? Often because they are cheaper, more responsive and less geared towards big banks and institutions than the UK’s. Because if you are a capitalist like me you believe in market competition. Conservatives once understood this instinctively. 4/13

All EU markets have equivalency. From 1 Jan I may not have permission to trade EU Securities on an EU Exchange under EU Securities law because the EU are dragging their feet on ‘Equivalence’ and @hmtreasury don’t seem to care 5/13

Worse, a Dutch client whose depositary interests are traded in Cyprus who has been told by Euroclear they need a new EU custodian for their DI’s in Europe because CREST will not apply for EU recognition (a cynical business ploy by Euroclear) This affects every UK DI program 6/13

Many EU securities are traded in the UK as depositary interests - they will all need a new custodian. More money for Euroclear, more reason for EU companies to abandon London - you’d almost think there was a cunning plan... 7/14

Meanwhile the UK is happy to let Euroclear own and operate the CREST system in the UK and turn us into a balkanised clearing system. CREST is already in need of reform as issuers have little visibility of their underlying small shareholders who get a raw deal as a result 8/14

Similarly practitioners fear that Standard Listing - introduced to help EU/EEA companies list in the UK - will be the next victim of the FCA’s plan to destroy the small-cap market they hate. Together with the systemic failure we are seeing on AIM I fear for UK stock markets 9/14

In the City there’s widespread acceptance of the EU Prospectus Regulations as a sensible idea. We’ve even grown to accept MIFID although I would repeal parts of it in time. The real issues we face are the inconsistency and stupidities of the FCA rulebook pre and post Brexit 10/14

So we will be cut off from the parts of EU financial services that help small firms and saddled with a regulator that’s not fit for purpose and an @hmtreasury which doesn’t seem to care even though many ministers- including my good friend @Jesse_Norman - used to work in it. 11/14

My long term followers know I was a strong proponent of #EFTA and #EEA before Brexit. By staying in the single market we could have retained our passporting but pushed for a new financial services pillar to the EEA entrenching London in the European system 12/14

The @EFTA4UK campaign to #MakeBrexitWork is a good one - we can use #EFTA to interact better with Europe in many areas. The UK and Switzerland share a common cause on finance and markets. The EEA offers a nuanced tariff free mechanism to benefit from the single market 13/14

Regardless of what happens on 1 January 2021 take it from me, a practitioner: UK financial services and markets are a mess. If the government could be bothered to help I’d be a lot, lot, happier. A #BetterBrexit was never needed more. 14/14