By Hugh Jones
LONDON, May 17 (Reuters) – The European Union’s executive body said on Wednesday it has formally adopted a draft memorandum of understanding (MoU) to enable UK and bloc financial regulators to work more closely together, although they are denied access to the market.
Britain has left the EU, largely breaking its financial sector’s previously unfettered access to the bloc.
As part of Britain’s Brexit terms with the bloc, the EU agreed to formalize financial watchdog cooperation, but it was suspended by Brussels following disagreements between the bloc and Britain over Northern Ireland.
That quarrel was resolved with the Windsor Framework.
The European Commission said on Wednesday it has adopted the draft MoU, although it still needs final political approval from EU countries before it can be signed by the Commission on behalf of the EU.
“I am confident that our relationship and future engagement in financial services will be based on a shared commitment to preserving financial stability, market integrity and the protection of consumers and investors,” said Mairead McGuinness, EU Financial Services Commissioner. services, in a statement. .
The MoU will create a joint EU-UK Financial Regulatory Forum, similar to what the EU already has with the United States.
“The memorandum does not address UK-based companies’ access to the internal market – or EU companies’ access to the UK market – nor does it prejudge the adoption of equivalence decisions,” the Commission said.
The EU has granted ‘equivalence’ or access to the EU market to London’s derivatives clearing houses until the end of June 2025.
Meanwhile, the bloc has proposed a bill to force EU banks and asset managers to move a yet-to-be-determined portion of their clearing from London to the bloc, though industry officials expect equivalence to be expanded in some countries. form after June 2025. (Reporting by Huw Jones; editing by Paul Simao)