The Government had indicated it is willing to continue to remain party to the European Securities and Market Authority among other supervisory bodies as part of its new relationship with the European Union, its Brexit white paper reveals.
The 77-page document builds on the 12 objectives Prime Minister Theresa May set out in her speech on Brexit last month. This week MPs voted for a bill that allows the Government to trigger article 50 and begin the Brexit process.
In a section focussed on European union agencies the white paper makes specific reference to the European (Financial Services) Supervisory Agency, which includes ESMA, as well as the European Banking Authority and European Insurance and Occupational Pensions Authority.
The white paper states: “These can be responsible for enforcing particular regulatory regimes, or for pooling knowledge and information sharing. As part of exit negotiations the Government will discuss with the EU and Member States our future status and arrangements with regard to these agencies.”
The EBA is currently based in London and member states including Germany, Spain, Ireland, Poland, Italy and Sweden are all rumoured to have their eye on attracting the regulatory body.
The white paper includes a specific section on financial services, which is scant on detail; however, it pitches the UK as a “European global financial centre”.
It warns that over 75 per cent of the EU27’s capital market business is conducted through the UK and that the UK manages £1.2trn of assets on behalf of European clients.
EU27 firms also have an interest in continuing to serve UK customers.
Regarding negotiations over financial services the white paper states: “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.”
The global financial crisis is used as an example to show the mutual benefits to cooperation in highly integrated markets such as financial services.
“Since that time, the EU has taken a number of steps to strengthen collective oversight of the sector,” the paper continues. “As the UK leaves the EU, we will seek to establish strong cooperative oversight arrangements with the EU and will continue to support and implement international standards to continue to safely serve the UK, European and global economy.”