Brexit remains firmly in the news. But elements of the media are still fighting the last war, like Japanese warriors lost in the jungle. Brexit is coming. We need to be ready.

Two big issues trouble the City: the Single Market and immigration. We know that controlling population flows is a government red-line and we also know that the EU plans to link these issues firmly together. The Secretary of State for Our Future sees retention of Single Market access as ‘very improbable’. But what does this really mean?

The City seldom talks in terms of immigration; its concern lies with expertise and residence for group management from overseas. No UK government is going to use repatriated control over immigration to threaten City prosperity and its ability to fill the nation’s coffers. With a little effort the City can develop an immigration policy that government can adopt, one that will permit businessmen and women to come to the UK and employ UK residents, while enabling government to meet its targets. It is not rocket science and the political will is backed by a clear and specific mandate.

The Single Market is a little more complex. Glib and alarmist media enjoy leaving the impression that, if out of the Single Market, the UK will be unable to trade with the EU. They say no more, but those who lay the golden eggs must be the ones to mould the future. For the industry, access is defined by regulation and tax.

Without our steadying hand, the EU may plunge ahead with its tobin tax. If it pursues that destructive course, it will certainly raise barriers to protect its uncompetitive markets and anyone selling a taxable service into the EU will be levied. The degree of discrimination will be negotiated at EU level. Whether the EU will really risk a trade war with all its biggest markets will depend on how suicidal it becomes. Its own members will not accept excessive measures. For levies on EU imports, the worst case position is WTO terms, which amount to 4%. Will EU exporters accept that? It seems unlikely. The tax deal will be hard fought, but, despite the rhetoric, pragmatism will win the day.

The other weapon is regulation. Honest brokers see regulation as a necessary evil to protect investors and address information asymmetry. The EU has shown, by activity and by structure, that for it regulation is a protectionist tool. Its favoured nation structure is based on its equivalence test, over which the European Commission has, by no accident, retained direct control. Use of equivalence is growing, seemingly born in AIFMD and now moving into MiFID II. Although not yet in UCITS, it is only a matter of time. But equivalence is not congruence. And at this point the UK is indisputably equivalent. Recognition of that fact will be a feature of The Great Negotiation.

That brings us to the passport. For some, this is the story. Is there life without the passport? But three years ago, before the then-dreaded AIFMD came into play, there were no fund passports except UCITS. The national private placement regime operated adequately – had that not been the case, AIFMD could not have achieved its famed pariah status. NPPR is under threat, but provisions for third country funds, and even third country AIFMs, are there in the directive’s text. Most importantly, AIF portfolio management can be delegated, subject to equivalence. And likewise UCITS portfolio management, where, as yet, equivalence is not required.

So where’s the problem? Well, UK domiciled UCITS are under threat. If they are excluded, as they will be in the absence of some improbable sweetheart deal, Dublin will offer an excellent service, precisely along the lines of ‘hosted’ UCITS today. It is a modest service which allows the London-based portfolio manager to focus on the job in hand. Existing UK UCITS will spawn EU clones, but interesting choices will face regulators and investors: what will become of the UK funds? FCA will continue their authorisation but the EU will regard them as AIFMs. So, still promotable in the UK, marketable in the EU, subject to AIFMD, and available to the rest of the world, just as today.

That leaves MiFID. Those who value their MiFID passport will be looking at how best to serve their EU clients in the future. Many will conclude that a foot-hold in the EU is necessary as a contracting entity and passport holder. But much, perhaps very much, of the portfolio management and/or investment advice will continue to take pace in London.

So, is nothing good coming out of Brexit? All this is damage limitation. But all this is about how we continue to serve the EU institutions and population. What about the rest of the world? What about the growing economies that need financial services? They – they and the UK consumer alike – will not be concerned with equivalence, just with sound investor protection. Will we develop double standards? FCA thinkers, the trade bodies, the industry, all need to contemplate how we can best compete with the US, with Singapore and with Hong Kong. There may be the EU-equivalent standard and there may also be the rest-of-world standard, good enough for UK consumers and good enough for export. There may be a price differential and that may lead to some interesting market data, revealing whether consumers are keen to pay up for added protection, or prefer to accept the FCA’s assessment of adequate protection at a lower price.

With a regime designed to deliver, global competitiveness will make a come-back.