City lobbyists to launch a fresh bid for "mutual recognition" between UK and EU financial regulators

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The UK voted to leave the European Union on 23 June. (Source: Getty)

A major City lobby group is set to launch a fresh bid to win support for mutual regulatory recognition for the UK and the EU's finance businesses within weeks.

TheCityUK is to double-down on calls for a bespoke deal on financial services based on a principle of mutual market access for firms on both sides of the channel.

The group's experts are currently fleshing out the final details of the plan, which would build on a report published by the lobbyists in mid-January, calling for regulators in the UK and Europe to offer recognition of each other's regimes.

It would go further than current equivalence systems by removing issues like the risk of permissions being revoked with as little as 30 days notice.

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“The problem with equivalence as it stands is that it is as much a political as regulatory determination,” said TheCityUK chief executive Miles Celic.

Celic said that for some sectors, such as banking, there is already well established international regulatory mechanisms, but he added this “isn't as well developed” in areas like insurance.

“What we would need therefore is something that covers the whole piece and therefore does allow for regulatory standards to be recognised in the European Union.

“Ideally you would have a system that recognises when different regimes are heading in the right direction but that they might take slightly different routes in order to get there,” Celic said, adding this may require the establishment of a new authority for dispute resolution.

“Where there are issue of dispute or a need for some kind of arbitration what are the mechanisms for that? We might want to explore that,” he said.

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It comes after Bank of England governor Mark Carney last month told the Treasury committee that a similar set up would require “some form of dispute resolution authority, which is not a UK one or an EU one but, as in a trade deal, a separate panel of experts and is able to make judgements.”

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