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Brexit & Third-Country Arrangements

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)

Public and private
sector views

Industry views

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

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

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

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

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

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

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