The City of London may not know whether it will gain post-Brexit access to EU markets until next year, according to Brussels’ financial services chief.
European Commission executive vice president Valdis Dombrovskis warned yesterday that regulatory equivalence – which would give City firms access to the EU – could still take months to be granted.
Dombrovskis said EU member states have still not come to terms with their own regulatory changes for the financial services sector, meaning it could take some time to secure market access for the UK.
“In some areas we will not be in a position to adopt equivalence decisions . . . not all EU parameters are in place in these areas,” Dombrovskis said.
“Implementing rules are not yet in place.”
Financial services access after the end of the Brexit transition period on 31 December has not been a part of the UK-EU free trade deal talks as each country can decide unilaterally whether to allow access to the other’s financial services firms.
Square Mile firms will only be able to continue to access lucrative EU markets if Brussels grants the UK regulatory equivalence for financial services.
Brussels only grants equivalence if the UK’s regulatory regime is comparable to the EU’s.
Dombrovskis said the UK may have to broker arrangements with individual EU countries on financial services to ensure City of London firms do not completely lose access to mainland Europe on 1 January.
“UK investment firms can have this access via national regimes,” he said.
It comes after the UK was late in submitting its equivalence assessment forms to the EU earlier this summer.
Downing Street blamed the delay – which amounted to a few weeks – on the EU handing over the forms at the last minute.