Brexit & Third-Country Arrangements - Eurofi

Context

Brexit has been a relatively smooth process in the financial sector thanks to the preparation of the financial industry and the cooperation of the EU and UK regulatory and supervisory authorities over the last few years.

Case-by-case equivalence arrangements are due to be the basis for future EU-UK relations, but so far only UK-based CCPs have benefitted from a temporary recognition of equivalence. Going forward the Memorandum of Understanding (MOU) in the process of being agreed between the EU and the UK should facilitate regulatory and supervisory cooperation between the two jurisdictions.

Now that firms have adapted to the new Brexit environment, there is however less demand on the industry side for reaching EU-UK equivalence agreements.

In addition, the insufficient predictability and alleged politicisation of these arrangements continues to be criticised by the industry, despite the improvements that were put in place in 2019 by the European Commission for enhancing their transparency.

Pending questions related to Brexit include the extent of future divergence between EU and UK legislations, as the UK reviews rules to adapt them to its needs and the future of delegation arrangements notably in the asset management sector. How the EU financial sector will evolve in the post-Brexit context and whether further initiatives are needed beyond the CMU and Banking Union for strengthening and further integrating the EU financial sector is a further question.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Eurofi policy notes

Optimizing third-country approaches in the financial sector: the challenges of Brexit - April 2020

Financial policies for dealing with third-countries - September 2019

Brexit: what way forward less than 1 year from the Article 50 deadline? - April 2018

Session summaries

Exchange of views : Post-Brexit regulatory divergence: potential magnitude and impacts - Prague Financial Forum - September 2022

EU-UK relations: what future perspectives and impacts on their financial sectors - Ljubljana Financial Forum - September 2021

Global financial fragmentation: can progress be made? - Lisbon Virtual Seminar - April 2021

Nearly 4 months after Brexit: where do we stand and future prospects - Lisbon Virtual Seminar - April 2021

Can the EU manage without the City and how will financial services regulations with third countries evolve post-Brexit? - Berlin Financial Forum - September 2020

How to enhance financial policies for dealing with third countries (equivalence, supervisory cooperation…) ? - Helsinki Financial Forum - September 2019

Latest Brexit developments and future of EU-UK relations in the financial sector - Helsinki Financial Forum - September 2019

Public and private
sector views

Public authority views

J. Berrigan - DG for Financial Stability, Financial Services and Capital Markets Union, European Commission - Global financial fragmentation: can progress be made? - April 2021

J. Berrigan - DG for Financial Stability, Financial Services and Capital Markets Union, European Commission - Nearly 4 months after Brexit: where do we stand and what way forward for the EU and UK? - April 2021

K. Braddick - HM Treasury - The future of financial services in the UK - April 2021

V. Ross - European Securities and Markets Authority (ESMA) - EU-UK regulatory and supervisory relations in a post-Brexit world - April 2021

K. Braddick - HM Treasury - How are EU-UK financial relations expected to evolve post-Brexit? - September 2020

S. Maijoor - European Securities and Markets Authority (ESMA) - Brexit and the changing landscape of EU financial markets - September 2020

C. Noyer - Banque de France - EU-UK Financial relations post-Brexit: where are we heading for? - September 2020

J. Berrigan - EU equivalence policy – a tool for regulatory convergence - April 2020

S. Maijoor - ESMA - Enhancements to the EU equivalence framework - April 2020

Industry views

S. Boujnah - Euronext - Following Brexit, a strong and multipolar capital market is rising in the EU - April 2021

B. Mensah - Bank of America - Why non-financial reporting matters - April 2021

K. Nakamura - Sumitomo Mitsui Banking Corporation & Sumitomo Mitsui Financial Group - After Brexit - Looking towards closer regulatory cooperation - April 2021

P. Thomson - J.P. Morgan Asset Management - Putting customers first means cooperation over competition - April 2021

S. Toda - Mizuho Financial Group, Inc. / Mizuho Bank, Ltd. - Drive globally balanced sustainability through regulatory coordination - April 2021

M. Ronner - UBS Group AG - More international coordination today to improve financial system resilience tomorrow - April 2021

M. Ronner - UBS - A healthy financial ecosystem to strengthen the European recovery - September 2020

K. Swinburne - KPMG in the UK - Capital markets: open or closed? - September 2020

S. Toda - Mizuho Financial Group, Inc. / Mizuho Bank, Ltd. - Regulatory fragmentation may affect allure of City for international banks - September 2020

H. Väth - Frankfurt Main Finance e.V. - Never waste a good crisis - September 2020

J. von Moltke - Deutsche Bank AG - Building an open and competitive financial market for Europe - September 2020

B. Martin Jimenez - UBS - Outcomes- focused equivalence is key to delivering the EU’s Capital Markets Union - April 2020

S. Toda - Mizuho Bank - The longevity of the equivalence framework in a post-Brexit world - April 2020

Reference documents

Withdrawal agreement – Political declaration - October 2019

Communication of the Commission: Equivalence in the area of financial services - July 2019