PA Consulting’s David Biggin, a financial services expert, is quoted in an article about how UK negotiators are now striving to reclaim selected access to EU financial markets, post-Brexit. He discusses the value of equivalence within EU financial markets, and how its value might be limited.
David says: “My view is that, if you are an international business, you almost always have to have a substantial presence in that country to service clients and you need a local presence to be competitive. Once you have that presence, you have local authorisation anyway.”
David believes passporting is probably more useful to growing businesses such as payment firms. Also, he explains that firms that had to move assets because of Brexit have already done so. “Equivalence decisions for the future are less crucial because we prepared for the worst, but it would be a nice bonus and a good footing for financial services in London if we do get it,” he adds.
The article continues to explain that there is recognition within the EU that passporting does not work to the extent that it should, meaning a lot of financial products have to be country-specific for various cultural and national regulatory reasons.
The article goes on to recognise there are reservations over the value of equivalence among UK officials. On January 6, Bank of England governor Andrew Bailey warned against blindly following EU rules to access its financial markets at too high a price, adding that the UK should not be a rule-taker.
Whether or not equivalence is granted could yet have some bearing on how the two regulatory regimes evolve in the future.