EU Warned By UK Of Tit-For-Tat Steps On Financial Sector Post Brexit

If the European Union does not change its stance on the City of London after Brexit, then there could be regulations for about 7,000 European-based investment funds which depend on British clients for their cash and profits, warned the UK negotiators to their counterparts in Brussels.

The EU’s chief negotiator – Michel Barnier, has taken a dogmatic position which has resulted in a veiled threat being issued by British side directed at EU interests.

The UK could put in place obstacles for European financial interests operating in the UK if all UK sectors of the City of London is not allowed to operate after Brexit as they are doing today after Brexit, said a section of a UK presentation made to the European commission’s negotiators last week.

According to the UK government, the EU’s “equivalence regime”, which would grants rights to the UK providers to offer financial services with the European economic area even after Brexit, is not enough to cover enough sectors or enable offering of adequate assurances to UK-based banks and fund managers.

Om the issue of whether parts of the financial sector will have the ability of continued operations across the Channel as regulations diverge after Brexit, the UK desires that a decision of equivalence should be taken collaboratively between Brussels and Whitehall.

According to the existing EU legislation, only 30 days’ notice is enough for revoking a declaration of equivalence.

There is resistance within the EU at offering a customized deal for the financial services. It says that if the US financial providers can work under the present conditions, so can those from the UK.

Damaging barriers to trade would be raised by both sides if there is no fresh thinking, said a presentation given by the UK negotiators last Wednesday. “There is no third country equivalence regime to support the rights of around 7,000 EEA [European Economic Area] domiciled funds to market to UK retail customers, who operate under the passport today”, the paper said.

There is a possibility that funds that are domiciled in the EEA would be allowed continuance of offering of services in the UK. But that would be allowed only after such firms clear some additional regulatory hurdles.

In his reporting back on the negotiations to the member states on the Brexit white paper, UK’s position had been misinterpreted by Barnier, complained the British negotiators last week.

The importance that both the UK parliament and EU institutions uphold their “autonomy of decision-making and the ability to legislate for their own interests” was repeatedly stressed in the UK’s paper.

Brussels had been “very kind to the white paper, given that it is a completely unworkable document”, a senior EU official told the media.

(Adapted from TheGuardian.com)

Advertisements


Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: