Uk Eu Agreement on Financial Services

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The UK and EU Agreement on Financial Services: What You Need to Know

In a move that has been largely anticipated since the UK`s decision to leave the European Union in 2016, the UK and EU have finally reached an agreement on financial services. This long-awaited agreement provides clarity to the financial services industry in the UK and is a significant step towards the stabilization of the UK market.

So, what exactly does the agreement entail?

The agreement provides for a regulatory cooperation framework between the UK and the EU, which will allow financial services businesses in both regions to access each other`s markets. This cooperation framework will include regular dialogue between regulators, which will help to ensure a consistent approach to regulation and supervision.

Additionally, the agreement will provide for the continuation of existing equivalence decisions, which allows UK and EU financial firms to conduct cross-border business based on the recognition of each other`s regulatory frameworks. This means that UK financial services firms can continue to access the EU market under existing European rules, and similarly, EU firms can continue to access the UK market.

However, it is worth noting that the agreement does not include provisions for financial services passporting. Passporting is the ability for financial service businesses registered in one EU member state to provide services across the EU without the need for additional authorization in each country. Though this outcome was anticipated, it is a significant loss for UK-based financial services firms.

Despite the lack of passporting, the agreement provides a level of certainty for UK financial services firms looking to continue operating in the EU. However, it is important to note that this agreement is not comprehensive, and further discussions and negotiations will be necessary in the future to ensure a more comprehensive agreement.

In conclusion, the UK and EU Agreement on Financial Services is a significant step forward for the UK market, providing much-needed clarity for UK financial services firms. However, it is not a comprehensive agreement and further negotiations will be necessary to ensure greater stability for the industry in the long term.