Q: Is equivalence a backdoor route for UK firms to maintain
access to EU markets?
Jonathan Herbst, partner and global head of financial
services at Norton Rose Fulbright
It is very easy to answer this question by saying yes,
no or maybe.
Let's start with no.
The problems with regulatory equivalence in its current form
have been widely reported. First, that equivalence is a
patchwork system, not all pieces of EU financial services
legislation contain equivalence provisions that contain
passport-lite access to the EU. Notably, from a banking
perspective, this includes the Capital Requirements Directive
IV and is therefore a significant problem for UK banks. For
non-EU investment firms, the equivalence provisions that appear
in the Markets in Financial Instruments Regulation are limited
in the sense that they apply only when providing business to
per se professional clients and eligible counterparties. There
is also the opacity of the European...