Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Britain, EU edge forward with financial services forum plan

Published 23/02/2021, 13:06
Updated 23/02/2021, 17:00
© Reuters. EU Commission President von der Leyen and British PM Johnson meet in Brussels

© Reuters. EU Commission President von der Leyen and British PM Johnson meet in Brussels

By Huw Jones and Carolyn Cohn

LONDON (Reuters) - Plans by Britain and the European Union to set up a new financial cooperation forum by the end of March have made some progress but this will not automatically lead to market access, senior officials said on Tuesday.

Britain's trade deal with the EU that came into effect when it left the single market on Dec. 31 does not cover financial services, leaving the City of London largely adrift from its biggest export market. Trading in euro denominated shares and swaps has already left London for the EU and New York.

A forum for financial regulators from Britain and the EU to exchange views would help to improve relations. A forum has already been set up for EU and U.S. market watchdogs.

"We are in the process of exchanging texts and looking at that, and in due course we will come to a resolution," John Glen, Britain's financial services minister, told an insurance conference on Tuesday.

Separately, Mairead McGuinness, the EU's financial services commissioner, said "informal engagements" regarding a memorandum of understanding on regulatory cooperation were now taking place.

"Once we agree on our working arrangements, we can turn our attention to resuming our unilateral equivalence assessments," McGuinness, speaking at an online event at the European Parliament, said.

Glen said the EU's equivalence assessments would not be part of the MoU. "That is a process we can't control," he said.

The EU can grant direct market access for foreign financial services companies if it deems their home market rules to be equivalent or aligned closely enough to the bloc's own regulations.

Julian Adams, director of public policy and regulation at insurer M&G, said Brexit offers Britain an opportunity to have "fit for purpose" insurance capital rules.

"My priority would be to get that right, not to focus on equivalence per se, because I think if you don't do that you are allowing yourselves to be dictated to essentially by European policy setting the agenda," Adams told the insurance conference.

The EU has only granted two temporary equivalence decisions for clearing and settling trades for Britain.

© Reuters. EU Commission President von der Leyen and British PM Johnson meet in Brussels

"We consider our interests and will only take equivalence decisions that are in the EU's interests. There cannot be equivalence and wide divergence," McGuinness said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.