Background Context to Brexit
- Following the UK’s decision to leave the EU, we’ve entered a new era for businesses across the UK;
- Brexit brings uncertainty and challenges, as well as opportunities, for HSBC’s customers;
- Our priority is to support our customers and guide them through the impact of Brexit;
- The final outcome of the Brexit negotiations is still uncertain, including whether there will be a transition period after the UK’s departure from the EU on 29 March 2019. We’re planning for a range of scenarios, including a ‘hard Brexit’, to help us minimise any disruption for our customers.
Glossary of Terms
Here are explanations of the terms and abbreviations found in the FAQs:
EU – The European Union.
EEA - means the European Economic Area – i.e. Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK; plus Iceland, Liechtenstein and Norway.
Passporting licence - The EU passporting system enables banks and financial services companies that are authorised in any EEA country to trade freely with customers incorporated in any other EEA country with minimal additional authorisation. In a range of Brexit scenarios, once the UK leaves the EU, UK financial institutions (including banks such as HSBC UK/HSBC Bank plc will lose their “passporting rights” to provide certain activities/services covered by EU legislation to EEA incorporated customers.
- Will you move the operations of European Economic Area (‘EEA’) customers over to any entity located in the EEA? If so, where?
An HSBC migration process has been designed so that, even in the event of a ‘hard’ Brexit, impacted customers will be able to continue to benefit from the same or new financial products from the UK or Europe (as applicable) after 29 March 2019. Our Relationship Managers have already engaged all EEA incorporated customers that hold products that may not be available to them from HSBC in the UK post-Brexit and have informed them of the impact and our solutions. Please contact your Relationship Manager, where applicable, or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm) should you wish to discuss further.
- Should EEA incorporated entities with UK bank accounts consider opening new accounts with HSBC in an EEA HSBC location (e.g. the country of incorporation)?
We don’t envisage that EEA incorporated entities in the UK should need to open ‘local’ accounts unless individual circumstances merit. We’re working with businesses to ensure that there’s minimal disruption to existing products and services provided by HSBC in the UK to EEA incorporated entities. Customers should contact their Relationship Manager or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm) to discuss individual requirements and any potential impact to their services as a result of Brexit.
- Will HSBC be able to provide EEA customers with services post Brexit? How?
If the UK leaves the EU’s single market, financial institutions that provide services to EU customers from the UK, such as HSBC, may lose the benefit of the passporting licence and the regulatory equivalence to offer certain cross-border services to EU customers and counterparties from 30 March 2019.
HSBC is the largest bank headquartered in Europe by market capitalisation and we support customers across all European markets, including 6,500 multinational firms across the region.
We’ll ensure continuity of service predominantly through our French subsidiary, HSBC France, our main continental European hub with more than 8,000 employees, a strong balance sheet and extensive product capabilities.
We can also support our customers through other European locations including Germany, the Netherlands and Ireland as well as our subsidiaries and branches in Poland, Belgium, the Czech Republic, Ireland, Italy, Luxembourg, the Netherlands and Spain.
- I need to make payments to suppliers in the EU. How will payments be impacted?
HSBC will continue to be able to make payments in different EU/EEA currencies. If you’re making payments from your UK based account, and are a UK resident firm, we don’t foresee any critical issues. We’ll still be able to make payments in EU/EEA currencies the same way we issue payments in other currencies (e.g. the US Dollar, or Japanese Yen). However, your ability to make different forms of payment will depend on your existing banking arrangements. For further guidance, please contact your Relationship Manager or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm).
- How will HSBC ensure it can still support customers' reliance on low value clearing Single Euro Payments Area (‘SEPA’) from UK Euro accounts?
Access to the SEPA zone is driven by the rules and regulation of the European Payments Council (‘EPC’). The EPC is composed of EU, EEA and non-EU/EEA countries who adhere to the specific standards the EPC has - as well as any other requirements they deem necessary.
The UK’s access to the SEPA zone will be dependent on the EPC’s approval to allow the UK to continue to directly participate.
In the case where the UK isn’t given access to the SEPA zone, we can then offer our SEPA capabilities out of any of our Euro locations.
- Will I still be able to make Euro payments?
Yes. Consumers and businesses will still be able to make payments to the EU. The financial services industry, including HSBC, are supporting customers in their efforts to retain access to key euro payments systems. This includes the Single Euro Payments Area (‘SEPA’). This will ensure that SEPA payments can still be made.
The area in which the SEPA payment schemes (for Euro credit transfers and direct debits) are available is broader than the European Union. It includes over 34 countries.
- What is the Single Euro Payments Area?
SEPA is where consumers, businesses and other economic actors can make and receive payments in Euros. These common standards make payments quicker and simpler. It can also help businesses access new markets.
The European Payments Council (‘EPC’) helps manage the pan-European SEPA schemes. These offer payment service users the assurance of common rules and maximum execution cycles. They also support:
- People working and studying abroad;
- Those who have retired to another EU country;
- Anyone with a second home.
- What impact will there be on HSBC's ability to support high value clearing from UK Euro Accounts for urgent payments?
We aim to continue to offer these financial products and services to customers in the UK and EEA locations where they’re currently offered.
- Will payments to the EU cost me more money?
While future government regulations will only apply in the UK, we don't expect there to be extra charges for using a card in EU countries. Existing foreign exchange charges will still apply.
- Will my normal payments, such as Direct Debits, be affected?
No. Everything will be the same as it is today.
- Does Brexit change the terms of my product(s) with HSBC?
We’ll continue to support our customers to ensure service continuity. In the majority of cases, product terms will not change as a result of Brexit. Depending on local regulations, EEA incorporated businesses with products in the UK may be impacted and should refer to their Relationship Manager for further guidance, or the HSBC Brexit Helpline on 08000 12 1614 (Monday to Friday 9 am – 5 pm).
- I’m an EEA incorporated company operating in the UK. Will I still be able to apply for UK Banking Services?
Yes, we’ll still be able to consider product bookings to EEA incorporated entities after Brexit. However, there may be some restrictions depending on local regulations in the country of incorporation of the EEA entity and the types of products requested. Business customers should contact their Relationship Manager for more guidance, or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm).
- What impact will a ‘hard’ Brexit have on HSBC's ability to provide customers with lending products (if no passporting or equivalent rights)?
We expect to continue to provide a full range of multi-currency lending products and services to customers by transacting:
- in respect of UK customers, from the UK through HSBC Bank plc/HSBC UK Bank plc (as applicable); and
- in respect of EEA customers, through one of HSBC’s existing European subsidiaries which already hold the necessary licences to provide equivalent services.
- After the UK leaves the EU, will Small Medium Enterprise (‘SME’) debt financing be more restricted?
HSBC doesn’t expect that leaving the EU will have a detrimental effect on funding to UK banked businesses. We recently announced our £12 billion SME fund for small businesses. We’ll continue to support the growth of SMEs in the United Kingdom.
- What will the Impact of Brexit on lending rates?
Lending pricing is managed on an ongoing basis and influenced by multiple factors including prevailing market interest rates, the cost of the Bank’s funding, competition, customer affordability, the Bank of England Base Rate among other factors. For customers that already have a fixed rate lending product, nothing will be affected. Should there be a change in the Bank of England Base Rate as a result of Brexit, applicable customers’ payments will adjust as normal in line with our terms and conditions. Our customers have the option to move onto a fixed rate product should they wish to secure short, medium or long term security.
- What should I do if my business can’t afford to keep paying my commercial mortgage, credit card or loan?
Some businesses can find themselves financially stretched from time-to-time. That's why we’re here to help firms find the right solution to their business challenges. We can talk about the payment options available to you and help you with a plan to deal with any payment problems and arrears. Please let us know as soon as possible if you have any concerns on paying down debt.
- Will UK and EEA incorporated SMEs be able to continue to access invoice finance, including support for cross border transactions?
In relation to UK businesses, HSBC Invoice Finance (UK) Limited will continue to be able to provide invoice finance solutions and will be able to make and receive payments in Euros and other European currencies. We don’t expect Brexit to interrupt HSBC Invoice Finance (UK) Limited’s ability to provide services to UK businesses, including in relation to export debts. For businesses outside the UK in Europe, we have possible invoice finance solutions available through our local European subsidiaries or other arrangements, dependent on the individual circumstances of any client’s needs. Any such customers should refer for more guidance to their Relationship Manager.
Cash and Liquidity Management
- How will Brexit impact HSBC's ability to support Euro Cash Concentration out of the UK and other EU countries?
We’ll continue to offer cash concentration services out of our key EEA countries including the UK, France, Germany, Ireland, and the Netherlands - subject to legal and regulatory requirements.
- How will Brexit impact HSBC's ability to support Euro Notional Pooling in the UK and other EU countries?
We’ll continue to offer a Euro notional pooling services out of the UK, Ireland, and the Netherlands.
We’re in the process of enhancing our Euro notional pooling service out of France. Customers wishing to include EEA participants in UK pools, post-Brexit, should discuss this with their Relationship Manager.
Credit / Debit Cards
- Can I still use my debit or credit card in the EU?
Yes. There will be no change to how you use your Debit or Credit Card following Brexit on 29th March 2019.
- Will surcharging on debit or credit cards return?
A ban on retailers charging extra fees for consumers to use a debit or credit card was introduced under the EU’s second Payment Services Directive (PSD2), implemented on 13 January 2018. The UK Government took the decision to extend the ban in the UK to other payment methods such as Amex and PayPal to further protect consumers. The regulations implementing PSD2 will continue to apply in the UK under the EU Withdrawal Bill. The surcharging ban remains in place for payments in the UK. Practically speaking, any payments made in EEA countries which have implemented PSD2 shouldn’t be charged any extra for using that card. Existing foreign exchange charges will still apply.
- Will my card payments cost me more money?
The financial services industry, including HSBC, is working closely with the government to limit any disruption to consumers. While future government regulation will only apply in the UK, practically speaking, we don’t expect UK consumers to be charged extra for using a card as a means of payment in EU countries. Existing foreign exchange charges will still apply.
- Will credit card purchases abroad still be protected and be unaffected by Brexit?
Yes. After Brexit you’ll still have the same overseas purchase protection overseas that you have today.
- What happens after Brexit if I become a victim of card fraud while I'm abroad in the EU?
The protections against card fraud afforded to consumers today will still apply after Brexit.
- Will there be any increases to my credit card interest rate or fees due to Brexit?
We don’t expect changes to your existing card’s interest rate and fees as a result of Brexit. We review rates and fees on a regular basis; we’d review and make changes in line with our terms and conditions.
- What impact will Brexit have on the HSBC's ability to provide the existing Euro Corporate Card regional proposition out of the UK?
We’ll continue to offer a GBP (Pounds Sterling) and EUR (Euros) corporate card proposition in the UK. This is subject to regulatory and legal requirements and where the client’s incorporated.
We’ll continue to also offer a domestic EUR corporate card proposition in France. We’re also building out a new regional cross-border Euro corporate card proposition to be offered out of an EU/EEA country.
Importers / Exporters
- What type of help/ support can customers get from HSBC when thinking through their operation model and customs/import/export procedures?
We’re working with customers to help them navigate the potential impact of Brexit on their business and support their Brexit contingency plans.
Our Coverage and Products teams can provide our customers with the right solutions to help them:
- overcome their potential treasury challenges;
- optimise their working capital;
- manage their payment and supply-chain risks; and
- mitigate their FX, commodities and Interest Rates risks.
Please contact your Relationship Manager should you wish to discuss this, or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm).
- Our business sells goods to the EU and get paid in Euros. How will we be affected?
This will depend on your banking arrangements. If you’re receiving Euros (or other EU/EEA currency) into a UK-based account, and are a UK-resident firm, we don’t foresee any issues. UK-based banks will still be able to receive payments in EU/EEA currencies the same way they receive payments in other currencies (e.g. the US Dollar, or Japanese Yen).
If you’re a UK resident business but receive your Euro payments through an account with a provider based in the EU/EEA, your ability to continue accessing the account will depend on the position taken by your service provider.
The ability of firms based in the EU/EEA to access UK-based financial services will depend on their local national regulation and we recommend that they contact their UK-based finance provider for more information.
FX / Markets
- Will I still be able to convert Euros to GBP and vice versa?
Yes, this isn’t affected by Brexit.
- Will Euros be more expensive to buy for my business / personal trips?
Fluctuations in currency could and do occur, but we work continuously to bring the best available price to customers.
- What impact will Brexit have on the HSBC's ability to support customers' spot and derivative trading requirements (if no passporting or equivalent rights)?
We expect to be able to continue to provide our full range of spot and derivative products to customers by transacting:
- in respect of UK customers, from the UK through HSBC Bank plc; and
- in respect of EEA customers, through one of HSBC’s existing European subsidiaries which already hold the necessary licences to provide equivalent services.
Credit Ratings & Business Credit Score
- Will my credit ratings be impacted in the UK in any way?
No. Your credit rating is a function of your historic record of managing your financial commitments in the UK. Unless your ability to repay your financial commitments is in any way impacted by Brexit, there will be no detrimental impact to your credit rating.
- Will Brexit impact the information held about me at the UK Credit Reference Agencies?
No. The robust controls around the data that’s held about you by Credit Reference Agencies will be maintained. The enhanced EU data protection rules brought in by the General Data Protection Regulation (‘GDPR’) in May 2018 have been transferred into new UK legislation and aren’t being amended.
Financial Distress / Cash-flow Difficulties
- What happens if it takes me longer to get paid by customers in the EU or my cash-flow is disrupted? What should I do?
We’d advise any firms concerned about cash flow issues to speak to us, as soon as possible, to discuss what products and support may be available. Where applicable, please refer to your HSBC Relationship Manager for guidance or the HSBC Brexit Helpline on 08000 121 614 (Monday to Friday 9 am – 5 pm).
Deposits – Sole Traders and Partnerships (UK Residents)
- Will the money in my account continue to be protected?
The Financial Services Compensation Scheme (‘FSCS’) will continue to protect accounts up to £85,000 held with a UK based deposit-taker. This increases to £170,000 for a Joint Account. Protection for UK based customers of EEA deposit-takers will vary depending on the approach taken by the provider after Brexit. The rights for an EEA firm to provide their services across border into the UK would change on a ‘no deal’ Brexit. EEA firms with a UK branch presence will be eligible to join the UK’s Temporary Permissions Regime which would require membership of the FSCS. Those EEA firms without a branch would be required to establish one and join the FSCS in due course; they could temporarily continue to trade in the interim, when deposit-protection of €100,000 would be provided by the firm’s home state deposit-guarantee scheme.
- Will I still be able to access my UK current and savings accounts abroad in an EU country?
Yes. As is the case now, customers will be able to access their UK savings account when they’re abroad in an EU country.
- Will I still be able to access my EU current and savings accounts when I’m in the UK?
Yes. As is the case now, customers will be able to access their EU savings account when in the UK.
- Will the UK leaving the EU lead to further Base Rate changes?
It’s not always easy to predict when the Bank of England will decide to increase/decrease their Base Rate. Should this occur, we’ll ensure that all impacted customers are notified of how the Base Rate change will impact them, in the same way that we currently do.
Data Security / Cross Border Data / General Data Protection Regulation (‘GDPR’)
- Will Brexit impact privacy protection?
The current Data Protection rules will still apply after Brexit.
- I have accounts with an EU bank. Will data protection rules stop me from dealing with my bank or accessing my account if there’s no deal?
GDPR constrains the transfer of personal data out of the EU. In recognition of the shared, strong privacy rules in the UK and the EU, the UK Government has committed to permitting transfers freely from the UK to the EU even if there’s no deal. This will help ensure UK consumers can engage with EU banks. The UK and EU are discussing a long-term solution for transfers from the EU to the UK. In the meantime, transfers from the EU to the UK will continue to be possible but will require firms to put more controls in place. UK financial institutions with operations and customers in the EU are preparing to have these controls in place, if necessary, in case of ‘no deal’ in order to ensure that communications with the EU can continue smoothly. EU firms with UK customers and partners will need to do the same.
- Will legislation in progress like PSD2 be implemented?
Yes. The majority of the PSD2 provisions apply from 13 January 2018. The exception is some conditions around strong customer authentication and secure communication. This is because they run to a longer timescale. We’ll let our customers know should there be any changes that impact them.