Global Banks Plan For No-Deal Brexit

International financial institutions in the U.K. are getting ready for changes as it becomes more likely there will be a no-deal Brexit in October, Bloomberg reported on Friday (Aug. 30).

Among the banks formulating action plans are JPMorgan Chase & Co., Nomura Holdings Inc. and Wells Fargo & Co. 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, sources told the news outlet. The government has told 3 million EU citizens in Britain that they should apply for settled status, which means they could continue to live and work in the U.K. following Brexit.

In March, JPMorgan starting relocating employees to other European cities and 300 people from its London staff had to sign contracts agreeing to leave the U.K. in the event of a no-deal Brexit, according to the report.

Nomura will transfer more people in the next few months, a source said, and Wells Fargo is planning to do the same.

“It’s inevitable that there will be a significant ramp-up in September or October,” said John Liver, financial services partner at EY. “There is really no way around that. … Efforts are being re-energized as people see the increased likelihood of a no-deal. It’s always been something that people need to plan for, but the reality of it is starting to strike hard.”

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 oversight of players in the investment fund industry.