U.K. Chancellor of the Exchequer Sajid Javid said the country will split from the European Union effective Oct. 31, Reuters reported on Monday (Sept. 30).
“Hopefully we leave with a deal,” Javid told ITV, Reuters reported. “If we cannot strike a deal, I think it is important to leave in any case and leave with no deal. It is not perfect but it is appropriate that we leave on the 31st.”
It’s unknown how a no-deal situation would affect the delivery of Brexit. According to the law, the prime minister supposed to put off Brexit — the U.K.'s exit from the EU — until a deal is made.
“The legislation that parliament has passed of course has made things more difficult, but we are clear our own policy is completely unchanged, we will be leaving on 31st,” Javid said.
International financial institutions in the U.K. have been getting ready for changes as it became more likely there would be a no-deal Brexit in October.
JPMorgan Chase & Co., Nomura Holdings Inc. and Wells Fargo & Co. are among the banks formulating action plans. They are anticipating a messy withdrawal from the European Union that could stifle entry into some markets and access to some talent.
JPMorgan employees were advised to scrutinize their immigration status, Nomura will transfer more people in the next few months, and Wells Fargo is planning to do the same.
Market regulators in the U.S. and the U.K. in March finished working on two potential agreements in the event of a no-deal Brexit.
The U.S. Securities and Exchange Commission (SEC) and the U.K.’s Financial Conduct Authority (FCA) will work together to watch derivatives reporting, credit rating organizations and also fund managers. The FCA has made similar agreements with other countries around the world.
The agreements were updated versions of the ones that were in place already. One is from 2006 and includes reforms made after the financial crisis, and the other is from 2013 and discusses the oversight of players in the investment fund industry.