The UK could adopt ‘third-country’ status in financial services upon its exit from the EU, according to the long awaited Brexit whitepaper.
The whitepaper described but did not discuss in detail “a range of provisions across many different pieces of EU financial regulation” that allow firms in member states “to provide financial services across the EU under a common set of rules and a single authorisation from their regulator”.
“Both UK and EU firms benefit from [passports]”, the whitepaper affirmed, pointing out that “there are over 5,000 UK firms that utilise passports to provide services across the rest of the EU, but around 8,000 European firms that use passports to provide services into the UK”.
The whitepaper said, without a firm commitment: “There are provisions that allow firms from ‘third countries’ to provide services across the EU, provided that their relevant domestic regulations have been deemed equivalent to those of the EU.”
“In our new strategic partnership agreement we will be aiming for the freest possible trade in financial services between the UK and EU member states.”
UK members of parliament voted yesterday in favour of triggering Article 50, which must happen before exit negotiations with the EU can begin.
The UK plans to formally announce its intention to leave the EU in March. Negotiations on the manner of its exit must be completed within two years.