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Preparing for Brexit

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Preparing for Brexit

We’re changing the way we structure our organisation to prepare for Brexit.

Barclays’ response to Brexit

Barclays’ overall European strategy remains unchanged. Our intention is to expand our existing subsidiary Barclays Bank Ireland (BBI) to become the legal entity serving clients in the European Economic Area (EEA), should Brexit result in a loss of relevant market access for the UK financial services industry. This is planned to occur ahead of the UK’s anticipated departure from the European Union (EU) in March 2019.

If you are a client and are affected by these changes, you will be contacted. This page is intended to support these interactions, and to provide information and tools to predominantly European (excluding the UK) clients of our Corporate Bank, Investment Bank, and Private Bank & Overseas Services businesses who are impacted by our plans and have been notified.

  • We have applied for additional regulatory authorisation as part of our plans to expand BBI, incorporating a European branch network into the expanded entity in line with our existing branch footprint in BBPLC. We anticipate authorisation of extension of the activities undertaken by BBI in Q4 2018.

    Barclays’ current intention is to continue to provide its current product and service offering to EEA clients via BBI after Brexit. There may also be instances where, due to the specifics of particular products and/or jurisdictions, certain EEA clients will continue to have a relationship with BBPLC.

    More detailed information on BBI (PDF 315KB)More detailed information on BBI
  • Barclays will use a number of legal mechanisms to transfer and/or duplicate in scope contracts and business arrangements to BBI, including:

    • A Part VII banking business transfer (a “Part VII”); 
    • Novations; 
    • Transfers under existing contractual right to transfer to affiliates; 
    • Amendments to product terms and conditions; or 
    • New documentation.

    Under a Part VII, the existing contractual arrangements clients have with Barclays will be deemed to be automatically transferred and/or duplicated to BBI, so there should generally be no need to re-execute such arrangements or sign any new agreements, which is expected to reduce the legal execution burden associated with the transition to BBI.

    Barclays intends to limit contractual changes under the Part VII to those amendments required to facilitate the client document migration to BBI.
     

    Further information about example contracts in scope for the Part VII and other transfer mechanisms (PDF 85KB)Further information about example contracts in scope for the Part VII and other transfer mechanisms
  • Barclays’ Brexit response will be effected in part through the Part VII, an English court approved transfer mechanism under Part VII of the Financial Services and Markets Act 2000. The Part VII will enable Barclays to move existing in-scope clients and prospective clients, and migrate the related business, client relationships and associated contracts from the current Barclays counterparty (Barclays Bank PLC, Barclays Capital Securities Ltd) to BBI via court order rather than by requiring individual legal document re-papering. Customer protection is ensured through regulatory and court scrutiny.

    Because of the efficiencies that Barclays believes the Part VII process affords clients, where appropriate, Barclays expects to use a Part VII to transfer and/or duplicate legal documents governed by English law, as well as those governed by, amongst others, German, French, Spanish and Italian law.

    Barclays will contact you directly with details of the specific contracts that you have and the specific transfer mechanisms applicable to you.

    Timeline for the Part VII

    A Part VII court process generally involves at least two hearings before an English Court which in practice are scheduled over a period of at least three months:

    Directions Hearing (currently scheduled for 23 October 2018), where Barclays will submit a scheme to the court, setting out the proposed transfers and duplications (the “Scheme”) and proposals for public notifications.

    • Following the Directions Hearing, we will contact you to notify you of your participation in the Part VII if we have identified you as in-scope to participate.
    • At the same time the court document setting out the Scheme (the “Scheme Document”) and a summary of the Scheme (the “Scheme Summary”) will be made publically available on this website.
    • You will then have an opportunity to review these two documents and should you wish to raise any issues with Barclays you can do this through your usual Barclays contact in the first instance.If you consider that your query has not been satisfactorily resolved by your Barclays contact, you are entitled to raise your issue with the court at the time of the Sanction Hearing. Details of how to do this will be published on this website following the Directions Hearing.

    Sanction Hearing (currently scheduled for 22 January 2019), where Barclays will ask the court to approve the Scheme (and the court would consider any objections raised by stakeholders or the public).

    • Once the court has approved the Scheme at the Sanction Hearing, client legal documents will transfer or be duplicated in accordance with the mechanisms specified in the Scheme Document. It is likely that there will be more than one effective date specified by Barclays to allow different clients and different legal documents to transfer or be duplicated at different times, following the Sanction Hearing as part of a carefully managed process. If you have any questions about the date of transfer or duplication, you should reach out to your Barclays contact.
    • Following the Sanction Hearing, the Part VII court order, the document which legally executes the Part VII, will be made available on this website. In some cases we may also contact you at this stage to facilitate the migration.
       
    More detailed information about Part VII (PDF 90KB)More detailed information about Part VII (PDF 90KB)
  • Legal Transfer Mechanisms outside of the Part VII

    Barclays intends to use the Part VII where appropriate given the benefits that this mechanism offer clients. However, in some circumstances, Barclays will use other mechanisms to transfer contracts and/or migrate business relationships including:

    Existing Transfer Provisions

    In relation to certain contracts that cannot transfer or be duplicated under the Part VII or where the use of Part VII is not possible or appropriate, we will effect the transfer to BBI in accordance with any explicit rights of Barclays PLC to transfer to affiliates as set out in the respective contractual documentation and in compliance with applicable contractual and legal formalities.

    Examples include:

    • Transfer Right (Debt) – In certain products (mainly deposits and other cash management products), the underlying agreements provide for notice of transfer. Barclays will set up relevant processes to comply with the relevant formalities to effect the transfer and affected clients will receive further communications about the timing and formalities for the transfer in due course.
    Novation

    In relation to contracts where no explicit transfer mechanisms are set out, and in circumstances where the use of the Part VII is not possible or appropriate, it will be necessary to execute a novation agreement (or, depending on the relevant jurisdiction, another similar agreement achieving equivalent effect) substituting BBI as the new contracting counterparty with you. We will set up a master novation agreement appropriate for the relevant product agreements and you will receive further communications about the novation process in due course.

    Changes to Terms and Conditions

    For certain products governed by terms and conditions (other than, for example, the Investment Banking Terms of Business or the Markets Terms of Business, which we will replicate and amend using the Part VII Transfer process), Barclays is permitted to make certain unilateral changes (including transfers to affiliates) on written notice. Clients with products governed by terms and conditions to be amended outside of the Part VII process will receive further communications about the timing and formalities to effect the relevant changes in due course.

    Other

    Article 58 of the Italian Consolidated Banking Act (Article 58) – in respect of certain Italian law governed products (mainly legacy mortgages, cash accounts and products involving registered security interests under Italian law), Barclays will effect the transfer to BBI using Article 58, which enables the bulk transfer of certain assets and legal relationships through the publication of a notice in the Official Gazette of the Italian Republic and the completion of certain other formalities.

    What is the anticipated timeline for non-Part VII process?

    We plan to engage you from October 2018 onwards in relation to re-papering outside of the Part VII process.
     

  • In order to facilitate and give effect to the transfer of your business relationship(s) to BBI, we may need to make certain consequential amendments to the contracts and terms you have with Barclays (whether transferring and/or duplicating contracts through the Part VII or through one of the other mechanisms).

    Certain amendments may be generic/administrative, such as changes to the Barclays entity name, contact details, address, custody/securities account details, bank account details, process agent details, applicable regulator(s), and jurisdiction of incorporation.

    Certain other changes may be specific to the particular agreement type, and are expected to include amendments such as information sharing.

    The detailed list of amendments is currently in the process of being finalised with counsel, and will focus only on changes necessary to facilitate and give effect to the transfer of your business arrangements to BBI. Such amendments are not expected to include modifications to any terms commercially agreed.

    All amendments effected through the Part VII will be reflected in the Scheme Document submitted to the Court. They will also be summarised in the Scheme Summary. Both documents will be made available on this website following the Directions Hearing.

  • Further information about Brexit is available on the Bank of England and The Financial Conduct Authority (FCA) websites:

    Bank of EnglandBank of England The Financial Conduct Authority The Financial Conduct Authority
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