Any post-Brexit arrangement between the UK and
the EU would need to be grounded in mutual recognition of each
other’s financial services rules and standards.
But more work is needed to firm this solution
It is generally accepted that the UK cannot have a
post-Brexit relationship with the EU that involves the
passport, the arrangement by which a financial services
business established in the UK can operate across the EU whilst
being exclusively licensed and regulated in the UK. This is
because the passport is a feature of the single market, which
brings with it EU sovereignty, the very thing the referendum
result rejects. Further, a solution in which the UK applies EU
laws which it has no hand in making or interpreting is clearly
unsatisfactory, even for a transitional period. Instead, the
UK's Brexit negotiators will be expected to come up with
proposals for a new relationship...