Equivalence: Difference between revisions
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<span style="color:#4B0082">'''''Equivalence recognition unlikely'''''</span> | :<span style="color:#4B0082">'''''Equivalence recognition unlikely'''''</span> | ||
:"In addition to disrupting supply chains, Brexit has caused some fragmentation of banking activity for corporates. | :"In addition to disrupting supply chains, Brexit has caused some fragmentation of banking activity for corporates. | ||
:It seems increasingly unlikely that we shall see ‘equivalence’ recognition for UK/EU financial services that were not covered by the Trade & Cooperation Agreement | :It seems increasingly unlikely that we shall see ‘equivalence’ recognition for UK/EU financial services that were not covered by the Trade & Cooperation Agreement." | ||
:''The Treasurer magazine, Issue 4, 2021, p31 - Treasury in 2022.'' | :''The Treasurer magazine, Issue 4, 2021, p31 - Treasury in 2022.'' | ||
<span style="color:#4B0082">'''''Equivalence and passporting'''''</span> | :<span style="color:#4B0082">'''''Equivalence and passporting'''''</span> | ||
:"In brief, equivalence is the willingness of one regulator to accept that another regulator's rules achieve the same regulatory outcomes as their own, and so some element of cross-border activity can be allowed. | :"In brief, equivalence is the willingness of one regulator to accept that another regulator's rules achieve the same regulatory outcomes as their own, and so some element of cross-border activity can be allowed. | ||
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* [[European Economic Area]] | * [[European Economic Area]] | ||
* [[European Union ]] | * [[European Union ]] | ||
* [[Four way equivalence model]] | |||
* [[Free movement of labour]] | * [[Free movement of labour]] | ||
* [[Gold-plating]] | * [[Gold-plating]] | ||
Latest revision as of 06:14, 28 December 2022
European Union (EU) regulation.
In certain cases the EU may recognise that a non-EU legal, regulatory and/or supervisory regime is 'equivalent' to the corresponding EU framework.
That recognition, in turn, means authorities in the EU may rely on supervised entities’ compliance with the equivalent non-EU framework, and allow the entity to operate more freely than it might otherwise be able to (without equivalence).
This approach is designed to bring benefits to both the EU and third-country financial markets.
The significance of the equivalence concept, for UK financial services, is that the UK might choose, post-Brexit, to keep its regulatory regime closely aligned with the EU regime, in order to benefit from the possibility of equivalence.
- Equivalence recognition unlikely
- "In addition to disrupting supply chains, Brexit has caused some fragmentation of banking activity for corporates.
- It seems increasingly unlikely that we shall see ‘equivalence’ recognition for UK/EU financial services that were not covered by the Trade & Cooperation Agreement."
- The Treasurer magazine, Issue 4, 2021, p31 - Treasury in 2022.
- Equivalence and passporting
- "In brief, equivalence is the willingness of one regulator to accept that another regulator's rules achieve the same regulatory outcomes as their own, and so some element of cross-border activity can be allowed.
- Equivalence must be agreed, but is subject to negotiation, market by market.
- Passporting is the acceptance that once permitted to trade in one state, a business can trade in another without further compliance requirements."
- The Treasurer magazine, March 2017, p12 - Technical briefing.
See also
- Brexit
- EU-UK Trade and Cooperation Agreement
- European Economic Area
- European Union
- Four way equivalence model
- Free movement of labour
- Gold-plating
- Harmonisation
- Passporting
- Prudential Regulation Authority
- Schengen Area
- Single Market
Other links
Rethinking UK financial services regulation after Brexit, UK in a Changing Europe, December 2020
UK-EU future relationships: options for equivalence, Institute for Government, February 2020
