LONDON (Reuters) – Britain and the European Union must advance access to the EU financial market, as the coronavirus crisis will make it even more difficult to deal with a possible disruption if there is no agreement, the lobby said Monday. AFME bank.
FILE PHOTO: Flags of the European Union and Great Britain wave in front of a chancellery before British Prime Minister Theresa May’s visit in Berlin, Germany on April 9, 2019. REUTERS / Hannibal Hanschke / File Photo
Britain left the EU in January, but has full access to the bloc in a transition period that runs until the end of December.
London and Brussels blamed each other last week for failing to meet the June 30 deadline for evaluations of access to financial markets since January.
Direct access to the EU in the future will depend on whether Brussels considers UK regulation to be “equivalent” to the bloc’s rules.
Although much more limited than current access, without equivalence, EU investors would not be able to use financial services in London.
“COVID-19 has the potential to disrupt Brexit planning, which includes affecting customer readiness as well as potentially affecting companies’ ability to relocate staff to other jurisdictions,” AFME said in a statement.
AFME said ensuring that EU investors can continue to use clearing houses in London needed to be addressed before the end of September to avoid clients having to move derivative positions elsewhere.
Two-way access to equity and derivatives trading was also necessary to avoid disruptions, AFME said.
AFME called for a formal framework for UK and EU regulators to resolve differences that could jeopardize access.
“This is particularly important in the context of the rapidly evolving legislative agenda in the EU and UK, with a number of important financial services archives being proposed, to be implemented or reviewed in the second half of this year and the first half of 2021, ”said AFME.
EU chief Brexit negotiator Michel Barnier said last week that financial companies must prepare for the big changes in January.
“We will only grant equivalences in those areas where it is clearly in the interest of the EU, our financial stability, our investors and our consumers,” said Barnier.
Report by Huw Jones. Edited by Jane Merriman
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