Passporting covers a wide range of banking activities including accepting deposits, trading derivatives, underwriting of loans and bonds, portfolio management, payment services, insurance and mortgage broking. No licence is required for forex trading since it is an unregulated activity.
Currently, the passporting system allows a bank licensed in any one country within the European Economic Area (EEA) to sell their products and services throughout the bloc by getting an access to $19 trillion market consisting of over 500 million citizens Finch, G (2016).
EEA currently consists of 28 EU states plus Iceland, Liechtenstein and Norway.
London is popularly known as the world’s financial hub. About 1/5th of the UK’s annual banking revenue of around £23Bn to £27Bn is based on passporting activities Finch。All the banks that have their European headquarters in London will have to go through a tedious process of setting up new subsidiary offices in other parts of Europe, namely EU27.