The Department for Exiting the European Union (DExEU) has published its proposed framework for the future UK-EU partnership on financial services, and the London & International Insurance Brokers’ Association (LIIBA) has had its say on the added guidance.
Following the government’s release of the much talked about Brexit whitepaper last month, the UK’s negotiator has now shed further light on how it intends to proceed – specifically when it comes to financial services. The framework’s main considerations are autonomy and bilateral arrangements.
“The UK proposal would not undermine the autonomy of each party, while encouraging regulatory compatibility,” said DExEU, “with bilateral Treaty-based commitments to provide certainty and stability not provided for under existing EU equivalence regimes.”
It cited deficiencies not only in institutional process – which the department believes a bilateral agreement would overcome – but also further limitations in scope under the third country regime.
“It is therefore critical that we have a bilateral aspect to our relationship,” stated DExEU in the proposed framework. “The EU has already pursued such an approach, first in the offer to the US on TTIP (Transatlantic Trade and Investment Partnership), and now as agreed with Japan.
“Clarifying and formalising the process of managing cross-border regulation and market access will not limit either party’s judgement or flexibility, but rather will create greater confidence in and predictability of the process for affected firms and supervisors.”
According to the UK’s negotiator, it is not proposing an expansion of the third country equivalence regime to all the areas covered by the passport but rather that the scope of the relationship be defined appropriately in relation to mutually economically beneficial global market activity.
Reacting to the release of the document, LIIBA chief executive Christopher Croft (pictured) described DExEU’s publication of the paper as “very welcome,” citing the increased clarity it provides as far as the government’s proposal for financial services is concerned.
“We are also pleased to see it recognises the limitations of some equivalence regimes such as Solvency II,” commented Croft. “However, insurance intermediaries have no equivalence provisions at all under the Insurance Distribution Directive, so we have no feel for the level of market access it could afford us – or whether this would be sufficient to continue providing vital services to our clients.
“LIIBA is already engaged with government on this issue and will work hard to ensure it is at the forefront of negotiators’ minds as the Free Trade Agreement is developed.”
Meanwhile Dominic Raab has replaced David Davis as Brexit secretary following the latter’s resignation in July. Explaining his decision to quit, Davis previously told the BBC that he felt the UK was “giving away too much and too easily” to the EU.
