Arun Srivastava, Nina MoffattFrom: Brexit and Financial Regulation
Edited By: Jonathan Herbst, Simon Lovegrove
This chapter examines the EU equivalence regime, the different pieces of EU legislation that contain equivalence provisions, and the process for determining equivalence. EU legislation has tended to focus on activities carried on within the territory of the EU. However, in recent years, reflecting the internationalisation of financial services and the expanding competencies of the EU, EU laws have increasingly come to set out the terms on which firms operating from outside the EU can transact with and provide services to parties in the EU. This has resulted in equivalence regimes being written into EU laws. Following the 2016 Brexit referendum result, commentators suggested that such equivalence regimes could provide a composite basis for UK-based firms to continue to provide services into the EU, on a similar basis to how firms use their existing passports. In reality, however, the equivalence framework under EU law is fragmented and does not support such a composite approach to market access.