Newsflash: UK Releases Long Awaited Whitepaper on Brexit

July 13, 2018

The UK Government yesterday released its long awaited whitepaper on Brexit, "The future relationship between the United Kingdom and the European Union."

Whilst 100 pages long, the paper provided a fairly high-level direction as to the UK’s proposal for exiting the EU in relation to financial services.

Some key highlights include:

  • Recognition that the UK can no longer operate under the EU’s "passporting" regime. This therefore means firms which have been applying a "wait and see" approach will need to quickly reconsider their approach to the provision of financial services in the EU post-Brexit.

  • Recognition that whilst the EU currently does have an equivalence regime, this regime is not sufficient to deal with a third country whose financial markets are as deeply connected with the EU as the UK.

  • A proposal for an expanded equivalence framework to reflect this interconnectedness. This would include more structure relating to the application of the principle of equivalence, including a more transparent assessment methodology, a structured withdrawal process and a long-term stabilisation plan in accordance with WTO principles.

  • Highlighting the importance of the current state of regulatory dialogue and supervisory cooperation and high-level proposals as to how this may work in the future.

Whilst high-level, there is now a sense of direction of the UK’s proposals to the EU. The baton now passes to the EU to provide their reciprocal thoughts as to how a pragmatic relationship may be formed with the UK going forward that puts the needs of business and investors at the forefront.

If you would like to discuss the above or any of your Brexit related queries then please reach out to your usual Dechert contact.

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