The UK and EU Financial Services Agreement: What You Need to Know
The United Kingdom (UK) and the European Union (EU) have finally reached a post-Brexit trade agreement on the provision of financial services. The agreement, which was signed on December 24, 2020, covers a range of issues related to the provision of financial services between the two entities.
What is the UK and EU Financial Services Agreement?
The UK and EU Financial Services Agreement is a post-Brexit trade agreement that sets out the terms for the provision of financial services between the UK and the EU. The agreement is intended to provide certainty and stability for financial services firms operating in both the UK and the EU.
Key Points of the Agreement
The agreement covers seven areas, which include:
1. Cross-Border Trade in Services: The agreement allows financial services firms based in the UK and the EU to provide services to each other`s markets without the need for additional authorizations.
2. Regulatory Cooperation: The agreement establishes a framework for regulatory cooperation between the UK and the EU. This includes provisions for the exchange of information, consultation, and cooperation on regulatory matters.
3. Prudential and Supervisory Cooperation: The agreement provides for cooperation between UK and EU regulators on prudential and supervisory matters. This includes the exchange of information, consultation, and cooperation on the supervision of financial institutions.
4. Investor Protection: The agreement includes provisions to protect investors in financial services from the UK and EU.
5. Financial Market Access: The agreement provides for market access to the UK and EU financial markets. This includes provisions for the recognition of equivalence between UK and EU financial regulations.
6. Payment and Clearing Systems: The agreement establishes provisions for the continued operation of payment and clearing systems between the UK and EU.
7. Data Protection: The agreement includes provisions for the protection of personal data related to financial services.
What Does This Mean for Financial Services Firms?
The UK and EU Financial Services Agreement is a positive development for financial services firms operating in both the UK and the EU. The agreement provides greater certainty and stability for these firms, which will allow them to continue operating with minimal disruption.
However, there are still some areas of concern that need to be addressed. For example, the agreement does not cover passporting rights, which allow firms to provide financial services across the EU. This could lead to some firms relocating their operations to the EU.
Conclusion
Overall, the UK and EU Financial Services Agreement is a positive development for financial services firms operating in both the UK and the EU. The agreement provides greater certainty and stability for these firms, which is essential for the continued provision of financial services across borders. However, there are still some areas of concern that need to be addressed, and further negotiations may be required to address these issues.