Memorandum of understanding could help unlock market access; Agreement on regulatory cooperation adds tax policy as topic
Britain and the European Union are inching closer to reaching a
co-operation agreement on financial regulation by the end of this month
in a step that could help give firms in the City of London more access
to the single market.
The
EU could grant the U.K. so-called partial regulatory equivalence for
some financial products once the separate memorandum of understanding on
financial regulation is reached, according to a person familiar with
the negotiations.
While the two issues are formally separate, securing a common
framework around certain financial services rules could help unlock
some limited equivalence decisions allowing U.K. firms access to the
wider EU market, said the person, who asked not be identified discussing
private matters. The EU and Britain would retain their unilateral right
to grant or retract those equivalence rulings.
The two sides have been negotiating a memorandum of
understanding around regulatory cooperation on financial services since
January. The latest draft now includes calls for both sides to keep each
other informed about their taxation plans for the finance industry as
well as efforts to combat money laundering and terrorist financing,
according to a separate person familiar with the matter.
“We’re
in a good place around the memorandum of understanding,” Mairead
McGuinness, the bloc’s commissioner for financial services, said while
speaking to a group of journalists in Brussels on Wednesday.
The European Commission and the U.K. Treasury declined to comment on ongoing negotiations.
Bloomberg
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