Britain and the European Union agreed a new post-Brexit financial services pact on Friday that will allow them to co-operate on regulation but does little to improve the City of London’s access to the bloc.
Britain’s
finance ministry said the two sides have agreed terms on a “Memorandum
of Understanding” that will set the conditions for how regulators from
the EU and Britain share information.
However,
Brussels has said the MoU will not automatically lead to Britain’s
large financial industry being able to sell a wide range of products and
services to EU clients again.
Industry
experts said while the framework was useful, it was unlikely to
rekindle anything like the kind of access banks and brokers had to the
EU before Britain left the bloc.
Brexit
has already put a dent in Britain’s financial industry and a City of
London official has described the framework as a “talking shop”.
“This
is unlikely to offer solid foundations for bulk cross border business,”
said Simon Morris, a financial services partner at law firm CMS.
In
January, more than 6 billion euros in daily share trading left London
for Amsterdam, along with swathes of trading in derivatives.
In
a further potential blow to Britain’s financial services might,
Brussels is now considering forcing the clearing of euro swaps, still
dominated by the London Stock Exchange’s LCH arm in London, to move to
the bloc.
Friday’s
MoU agreement is similar to what the EU already has with the United
States for arranging regular, informal and non-binding meetings of
financial regulators to discuss new rules and air any disagreements.
So
far, the EU has declined to grant any long-term direct access for
financial firms from Britain, saying this week that it was in no rush....
more at Reuters
_________________________________________________________________________
Note: Press release from HM Treasury does not contain any detail.
Technical negotiations concluded on UK – EU Memorandum of Understanding
Technical discussions on the text of
the Memorandum of Understanding, which was agreed in a Joint Declaration
on Financial Services Regulatory Cooperation alongside the Trade and
Cooperation Agreement, have now been concluded.
Formal steps need to be undertaken on both sides before the
Memorandum of Understanding (MoU) can be signed but it is expected that
this can be done expeditiously.
The MoU, once signed, creates the framework for voluntary regulatory
cooperation in financial services between the UK and the EU. The MoU
will establish the Joint UK-EU Financial Regulatory Forum, which will
serve as a platform to facilitate dialogue on financial services issues.
© Reuters
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article