IRSG: Financial regulatory group calls for bespoke mutual access arrangement

11 April 2017

The International Regulatory Strategy Group proposes that the UK and EU mutually recognise of each other’s regulatory and supervisory regimes, enabling firms based in the UK to continue trading services across the EU and vice versa, with minimal disruption to their customers.

The paper concludes: 

• Criteria for access: Where global standards exist, and are robust and detailed, the criteria for access should be based on these.  These could include those set by the Basel Committee on Banking Standards, International Organisation of Securities Commissions (IOSCO) and the Financial Stability Board (FSB).
• Mechanisms for dialogue: A joint UK-EU committee or forum could be established to make sure that regulation and principles of supervision are monitored as they evolve over time. It should also assess the impact of divergences, for example consulting on new legislation before it would be brought into effect.
• Dispute resolution model: If the members of the new committee fail to agree on impact of divergences, a dispute resolution model would be necessary to deal with disputes between the UK and EU. This report sets out a range of models for dispute resolution mechanisms which already exist in free trade agreements or other arrangements.  But the report suggests that an entirely new model might equally be developed. These disputes could be referred to a new independent panel, made up of global standards setters (such as the FSB or IOSCO) or a new panel of experts predominantly from outside the UK and EU.
   

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