- UK Finance publishes Supporting Europe’s Economies and Citizens: a modern approach to financial services in an EU-UK Trade Agreement
- Report offers an ambitious trade in services framework to enable trade in banking and capital markets services across both the EU and UK following UK’s exit from EU
- Proposed model can be tailored to large financial institutions, mid-sized businesses and securities firms as well as smaller companies and retail customers
UK Finance publishes a new report setting out a proposal of how customers across Europe could continue to benefit from access to the cross border EU and UK banking and capital markets following the UK’s exit from the European Union.
The report ‘Supporting Europe’s Economies and Citizens: a modern approach to financial services in an EU-UK Trade Agreement’ sets out a framework for cross-border market access that can be delivered through a trade agreement.
Such an approach could be built around three overarching principles:
- mutual recognition of regulatory approaches;
- the appreciation that different customers have different levels of sophistication; and
- a high degree of regulatory and supervisory cooperation.
Developed by UK Finance in collaboration with Clifford Chance LLP and Global Counsel LLP, the proposed model can be tailored to the needs and capabilities of large institutions such as governments, banks and businesses, mid-sized firms, financial professionals, as well as smaller companies and retail customers.
The model can be included in an FTA or established as a standalone framework, and offers the following attractions to both the UK and the EU:
- Balanced and pragmatic – based on regulatory alignment, reciprocal market access and a level playing field;
- Uses trusted mechanisms – combines existing tools that are utilised in a variety of trade agreements, with elements from existing national licensing regimes that are in place alongside EU level policies; and
- Autonomy – Respects the desire of the EU and the UK to have the freedom to regulate and to have autonomy over legal regimes, but is flexible enough to enable countries to easily align their systems to facilitate close trading relationships.
The proposed model is based on WTO rules and could be readily adapted for use by other sectors of the economy covered by an EU-UK FTA.
UK Finance Chief Executive Stephen Jones said: “The UK is currently the second largest exporter of services worldwide. Tens of thousands of customers and billions of euros of banking and capital markets products and services are reliant on the UK remaining Europe’s most interconnected financial centre. As we near Phase II of the Brexit negotiations, we’ve designed an ambitious, credible and positive model which EU and UK policymakers can utilise to enable future trade in services between the EU and the UK.
“On exiting the European Union, it’s entirely possible to use the tools and trust we have established during 40 years of membership to construct a new Free Trade Agreement that preserves some of the benefits of close alignment without sacrificing political and regulatory autonomy.
“Traditionally services were not covered in great detail within Free Trade Agreements but there is every reason why, in an increasingly service-based global economy, an EU-UK FTA should include an ambitious and credible model for cross-border trade in financial services.”
Notes to Editor
- Supporting Europe’s Economies and Citizens: a modern approach to financial services in an EU-UK Trade Agreement available here
- Brexit Quick Brief #10 is available here