A lobby group representing UK financial services has launched a report outlining how the sector can establish reciprocal market access following Brexit.
Among the proposals in the International Regulatory Strategy Group report are the creation of a joint EU-UK committee to monitor the evolution and divergence of regulation and a dispute resolution model based on mechanisms used in other free trade agreements.
The group, which is backed by the City of London and TheCityUK, says disputes could be referred to a new independent panel, made up of global standards setters (such as the FSB or IOSCO) or a new panel of experts predominantly from outside the UK and EU.
The report, Mutual Recognition – A Basis for Market Access After Brexit, produced with support from law firm Hogan Lovells, suggests criteria for access could be based on global standards set by the likes of the FSB or IOSCO, or the Basel Committee on Banking Standards.
Chairman Mark Hoban says the report fleshes out how Prime Minister Theresa May’s call for a “bold and ambitious” free trade deal with the EU could be structured within financial and professional services.
Hoban says: “To minimise disruption and unnecessary cost for customers, the financial and professional services sector has been calling for a bespoke agreement to support the freest possible trade between the UK and the EU post-Brexit.”
He adds: “There are no easy solutions here but if the goal is to avoid fragmentation and maintain deep and liquid financial markets which benefit customers, then the UK and the EU will need to work together constructively to strike the right deal.”
Earlier this year, the group argued that the Government’s Brexit negotiations should focus on delivering a bespoke deal rather than adapting existing EU third country equivalence regimes for market access.
In her letter triggering Article 50, May pointed out that the EU and UK have regulatory frameworks and standards that already match
“We should therefore prioritise how we manage the evolution of our regulatory frameworks to maintain a fair and open trading environment, and how we resolve disputes,” the letter said.