On November 9, the Chancellor of the UK’s HM Treasury announced its intention to provide equivalence decisions to European Economic Area (EEA) States and Member States of the European Union (EU) that will come into effect at the end of the Brexit transition period (the Announcement).
The equivalence decisions are intended to deliver a range of benefits, including supporting well-regulated open markets, facilitating effective pooling and management of risk, and supporting UK and EEA clients’ access to financial services and market liquidity.
With the exception of the Central Counterparties (Equivalence) Regulations 2020 (SI 2020/1244), the equivalence decisions will be made by directions under the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (SI 2019/541).
The decisions will grant equivalence to specific provisions under EU legislation including:
- The Benchmarks Regulation ((EU) 2016/1011);
- The Capital Requirements Regulation (575/2013);
- The Credit Rating Agencies Regulation (1060/2009); and
- The Regulation on over the counter (OTC) derivatives, central counterparties (CCPs) and trade repositories (648/2012) (UK EMIR).
The UK’s Financial Conduct Authority and the Bank of England have published statements in response to the Announcement.
The Announcement is available here.