Question to the Department for Exiting the European Union :

To ask the Secretary of State for Exiting the European Union, what the options for an agreement on the terms for the UK's financial services industry after the end of the transition period are.

Earlier this year, the Prime Minister set out the UK’s vision for its future economic partnership with the EU at Mansion House and the Chancellor detailed how this would work for financial services during a speech at HSBC.

We will be seeking a bold and ambitious free trade agreement between the UK and the EU. Such a deal will be of greater scope and ambition than any such agreement before it, so that it covers sectors crucial to our linked economies such as financial services. This will require detailed technical talks, but as the UK is an existing EU member state, both sides have regulatory frameworks and standards that already match, with full alignment on Day One of our exit.

As the Prime Minister set out, we will not be seeking passporting, because we understand this is intrinsic to the single market of which we would no longer be member. Also, the Chancellor has been clear that a deal based on the EU’s existing third-country equivalence regimes would be inadequate for the scale and complexity of UK-EU trade.

Instead, given the highly regulated nature of financial services, and our shared desire to manage financial stability risks, we will need a collaborative, objective framework that is reciprocal, mutually agreed, and permanent and therefore reliable for business.

The Government has said that the principle of mutual recognition and reciprocal regulatory equivalence, provided it is objectively assessed, with proper governance structures, dispute resolution mechanisms, and sensible notice periods for market participants, could provide an effective basis for such a partnership.