Question to the HM Treasury:

To ask Her Majesty's Government what discussions they have had with the EU about equivalence recognition for UK-based financial services companies after 31 December.

On 9 November, the Government announced as many equivalence decisions for EEA Member States as it could in favour of openness, and where it made sense to do so, in the absence of clarity from the EU. These decisions were made to provide clarity and stability to industry. The granting of these equivalence decisions provides a broad range of benefits in terms of having open markets that are well regulated, facilitating firms’ ability to pool and manage risks effectively, and supporting UK and EEA clients’ access to financial services and market liquidity.

Equivalence assessments are an autonomous process, managed separately from trade negotiations. This applies in the case of the EU, and where the EU choose to grant the UK equivalence, this will be done in accordance with their own decision-making process. However, the Government has made sure that the EU has the information it requires to make a positive decision for the UK for all equivalence regimes, including decisions for which the EU have announced they are not currently assessing the UK. The Government has not received any further questions from the EU since returning all questionnaires to the EU in early July.

The Government is not ruling out further equivalence decisions for the EEA Member States in the future as it continues to believe that comprehensive mutual findings of equivalence between the UK and the EEA are in the best interests of both parties and we remain open and committed to continuing dialogue with the EU about their intentions in this respect.

The recognition of individual firms for the purposes of equivalence is a matter for the UK and EU financial services regulators. These regulators continue to be obliged to discharge their responsibilities for financial stability, consumer and investor protection and financial market operation. The regulators continue to cooperate on those issues and engage with each other as firms consider their planning for the end of the transition period and what will follow.