On 23 October 2023, HM Treasury published a joint statement, together with the European Commission, on the first EU-UK Financial Regulatory Forum which was held in London on 19 October 2023. The forum was established following the signing of the UK-EU Memorandum of Understanding (MoU) on Financial Services Cooperation on 27 June 2023.
The statement summarises the discussions held at the forum, which covered topics including:
- The benefit of structured regulatory cooperation between the UK and EU, as an important mechanism to support the sharing of views/knowledge and cooperation in financial services. Beyond the forum, the parties also noted the good ongoing cooperation on the design and implementation of sanctions.
- The organisational aspects and practical arrangements for the future of regulatory cooperation under the MoU, including how the forum could be used in the future to exchange views on subjects covered in the MoU including financial stability risks; implementing relevant international regulatory standards in the financial services sector; regulatory developments in financial services; the respective policies, rules and processes concerning deference regimes (such as equivalence) or other tools used to address cross-border issues; and efforts to prevent and combat money laundering and terrorist financing.
- Views on the outlook for market developments and financial stability, taking stock of the risk environment, current economic trends, and market conditions in this context.
- An update on the reforms to UK financial services regulation, including the implementation of the Smarter Regulatory Framework under the Financial Services and Markets Act 2023, and the Edinburgh and Mansion House reforms.
- A general update on the EU agenda concerning financial services until the end of the current legislature.
- Addressing vulnerabilities in non-bank financial intermediation.
- The need for international cooperation and continued bilateral dialogue, which remain important for monitoring vulnerabilities and enhancing the resilience of the financial system.
- On banking, work related to the implementation of the Basel III standards, including timelines and stages of implementation, as well as other topics including capital markets reforms and the importance of open and well-functioning capital markets.
- On insurance, updates on ongoing reforms to Solvency II and the importance of finalising the Insurance Capital Standard for International Active Insurance Groups.
- On digital finance, updates on developments concerning cryptoassets, stablecoins, and retail Central Bank Digital Currencies – the digital pound and the digital euro – in particular on their respective legal and regulatory frameworks.
- On sustainable finance, how best to progress multilateral efforts to support an orderly transition to net zero, including participation in the G20 Sustainable Finance Working Group among other fora.
The next meeting is expected to take place in spring 2024 in Brussels. The UK and EU agreed to follow up on topics discussed between now and the next meeting.