EU suggests 'equivalence' for UK firms post-Brexit

London (AFP) –


A top EU official on Tuesday suggested British financial services firms take the option of operating under an "equivalence" regime in the European Union following Brexit.

Equivalence is a system under which Brussels allows non-EU financial companies to operate in the bloc as it considers the regulatory regime of their home countries to be broadly equivalent to the EU.

So-called equivalence regimes are special bilateral arrangements already used by Wall Street, Japan and China, whereby they agree to meet EU rules to keep access to the bloc's single market.

Equivalence would be a step down from passporting, the system under which UK firms currently operate in the EU without any need for specific authorisation.

European Commission Vice President Valdis Dombrovskis, speaking in the British capital's Square Mile for the financial sector's annual City Week event, argued that equivalence could work for Britain.

"Equivalence is not perfect, neither for firms nor for supervisors," Dombrovskis said.

"Equivalence has proven to be a pragmatic solution that works in many different circumstances, and it can work for the UK after Brexit as well."

The remarks echo those from French Economy Minister Bruno Le Maire, who had also called last month for Britain to accept the equivalence regime.

Britain however wants Brussels to negotiate a Brexit free trade deal that will include the UK's crucial financial services sector, despite the EU already rejecting the idea.