2017 in the UK and the rest of Europe seems to have been primarily a year devoted to implementation – both of political decisions already made and of legislation that had already been enacted. On the political front, Brexit continued to dominate many conversations around EU financial services. Theories circulated that EU decisions on various equivalence and passporting provisions, intended to be based on regulatory system comparisons, were being delayed for political reasons linked to the continued non-finalization of a deal on the post-Brexit relationship between the UK and the rest of the EU. After Brexit, it is likely that UK financial services entities will lose the benefit of EU financial “passports” and may need to try and utilize the existing provisions on equivalence for non-EU countries. Equivalence is a recognition from the EU that the non-EU country’s financial regulations and supervision are of the same standard as those of the EU. Given that the UK, as a member state of the EU, already has such standards in place, granting equivalence status to the UK post-Brexit would be a logical step. However, politics and logic make strange bedfellows. UK financial services entities will be watching this area closely in 2018.
Read our annual outlook report, where we set out our summary of the progress of some important areas of financial regulation in 2017 and look ahead to expected developments in 2018.