On 11 June 2020, the House of Lords EU Financial Affairs Sub-Committee published a letter dated 27 May 2020 from John Glen MP, Economic Secretary to the Treasury, to the Chair of the House of Lords EU Financial Affairs Sub-Committee, regarding the committee’s review of financial services post Brexit.

Key points in the letter include:

  • The UK Government believes that successfully concluding equivalence assessments and delivering comprehensive positive findings will be in the UK and EU’s mutual interest. The UK Government can see no reason why the UK and the EU will not be able to find each other equivalent across all existing equivalence regimes.
  • It is the UK Government’s position that improvements to the equivalence process should include transparency and appropriate consultation in the process of adoption, suspension and withdrawal of equivalence decisions, while respecting the principles of autonomy.
  • The UK authorities and industry have taken extensive action to prepare for the end of the transition period. These actions include extending the temporary permissions regime for a limited period after the end of the transition period. While the UK has taken the action it can to mitigate the risks if disruption to cross-border financial services, the Bank of England’s Financial Policy Committee has judged that further action by EU authorities is needed to mitigate these risks.
  • The next phase of the Future Regulatory Framework review will set out how the UK Government proposes to approach financial regulation after Brexit. HM Treasury is considering the timing of this next phase, in light of the COVID-19 pandemic, and intends to say more in the second half of this year.