Financial Services passporting, third country status and equivalence in the UK post-Brexit

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Financial Services passporting, third country status and equivalence in the UK post-Brexit
  • Brexit and financial services
  • What is passporting?
  • UK’s status as a third country
  • How does the Commission assess equivalence?
  • The implications of an equivalence determination
  • Alternative forms of access to the EU markets
  • Alternatives to passporting across key financial services sectors
  • Brexit—Financial Services—timeline

Financial Services passporting, third country status and equivalence in the UK post-Brexit

Brexit and financial services

This note provides and overview of the issues faced by UK financial institutions that previously carried on business in the EU using passporting rights and the consequences for UK financial institutions following the loss of passporting.

This Practice Note forms part of a suite of key notes on Brexit and financial services. Other guides include the following:

  1. Brexit—Financial Services—overview

  2. Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime

  3. Brexit—impact on financial services

  4. Brexit and financial services—the temporary permissions regime (TPR)

At the end of March 2021, the UK and EU agreed a Memorandum of Understanding pursuant to the EU-UK Trade and Cooperation Agreement. This aims to provides a framework for ongoing regulatory co-operation and dialogue on financial services in a post-Brexit environment and establishes the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to facilitate dialogue on financial services issues. However, it does not alter the new reality for UK firms doing cross-border business into the EU, where a limited set of equivalence determinations fall short in replicating single market membership.

What is passporting?

Passporting allows a financial institution which is authorised in an European Economic Area (EEA) Member State (a home state) to conduct regulated business in one or more EEA Member States on the basis of its

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