The UK and EU Financial Agreement: What You Need to Know
After months of negotiations, the United Kingdom and the European Union reached a financial agreement on December 24, 2020. The agreement covers a range of issues, including trade, security, and fisheries. However, one of the most significant aspects of the agreement is its impact on the financial services sector.
The agreement is designed to establish a more level playing field for financial services providers in the UK and EU. It includes provisions for both market access and regulatory cooperation, which are intended to ensure that financial services firms can operate across borders without undue barriers or regulatory burdens.
One of the key aspects of the agreement is the recognition of so-called “equivalence” between the UK and EU regulatory regimes. Equivalence refers to a system whereby a country`s financial regulations are deemed to be equivalent to those of another country, allowing firms to operate across borders without the need for additional regulatory approvals or compliance measures.
Under the agreement, the UK and EU have agreed to a framework for establishing and maintaining equivalence in financial services regulation. This includes a commitment to ongoing cooperation and dialogue between the two parties, as well as regular assessments of each other`s regulatory frameworks.
The agreement also includes provisions for greater cooperation in areas such as market surveillance, data protection, and anti-money laundering. This is intended to help ensure that financial services providers can operate safely and securely across borders, while also protecting the integrity of the financial system as a whole.
Overall, the UK and EU financial agreement represents a significant step forward in establishing a more stable and predictable environment for financial services providers in both the UK and EU. While there may still be some challenges ahead, particularly as the UK adjusts to its new status outside of the EU, the agreement provides a solid foundation for continued cooperation and collaboration between the two parties in the years ahead.