A regulatory advisory group to the financial and professional services sector has today outlined a framework for EU market access as Government embarks on Brexit negotiations.
The International Regulatory Strategy Group (IRSG) proposes how the UK and EU could agree reciprocal market access in financial and professional services as part of its new relationship post-Brexit. The model would be based on mutual recognition of each other’s regulatory and supervisory regimes, enabling firms based in the UK to continue trading services across the EU and vice versa, with minimal disruption to their customers.
The paper, Mutual recognition – a basis for Market Access after Brexit, outlines possible criteria for access, the mechanisms for maintaining regulatory alignment, and how possible disputes between the UK and EU in relation to access could be resolved.
The paper concludes:
Mark Hoban, Chairman of the IRSG, said:
“To minimise disruption and unnecessary cost for customers, the financial and professional services sector has been calling for a bespoke agreement to support the freest possible trade between the UK and the EU post-Brexit. This is why we support the Prime Minister’s call for a bold and ambitious free trade deal.
“This report fleshes out how this ambitious deal could be structured to provide a robust framework for continued cross border trade. There are no easy solutions here but if the goal is to avoid fragmentation and maintain deep and liquid financial markets which benefit customers, then the UK and the EU will need to work together constructively to strike the right deal.”
The International Regulatory Strategy Group’s (IRSG) report earlier this year, EU's Third Country Regimes and Alternatives to Passporting, concluded that the focus of the Government’s Brexit negotiations should be delivering a bespoke UK-EU deal rather than reforming or adapting existing EU third country equivalence regimes for market access. This follow up report develops how a bespoke arrangement could work in practise.
The approach reflects the message set out in the Prime Minister’s letter to Donald Tusk; “as the UK is an existing EU member state, both sides have regulatory frameworks and standards that already match. We should therefore prioritise how we manage the evolution of our regulatory frameworks to maintain a fair and open trading environment, and how we resolve disputes.”
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