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18 October 2018

POLITICO: Commission downplays City’s cliff-edge Brexit worries

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The European Commission’s top financial services officials shrugged off UK fears that Brexit could disrupt the continuity of cross-border insurance and derivative contracts and that the bloc’s evolving stance on granting regulatory equivalence decisions is taking a protectionist slant.

Speaking at a POLITICO event Thursday in London — U.K. Financial Services industry: shaping the new trajectory — the director-general of the Commission’s financial services directorate, Olivier Guersent, said there will be no “cliff” on Brexit day for cross-border contracts.

On March 30 next year, contracts “will be continuous,” he said. Where companies could have problems after Brexit is if they want to “modify” those contracts, he added. Then, you “have to go to the … regulator and request authorization to do this. If you’re smart, you would have gone beforehand.”

Without a divorce deal between the U.K. and EU before March 29, firms fear that cross-border financial contracts will become legally uncertain without a backup plan in place, and have repeatedly called on the Commission to clarify how it intends to deal with the situation. But so far, it has refused to do so, saying it is a matter for the private sector to sort out.

Guersent’s latest comments frustrated U.K. Conservative MEP Kay Swinburne. She challenged him by stressing that “the world’s economists and central bankers tell us this is a problem.”

Swinburne also decried what she called Brussels’ “more protectionist, defensive” attitude toward its approach to equivalence rulings, which allow firms from outside the bloc to access the single market on the basis that their home regulations are compatible with the EU’s. [...]

Full article on POLITICO


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