With the Covid-19 crisis seemingly doing nothing to shake the United Kingdom’s resolve to leave the European Union on 31 December, talks remain tense, to put it mildly, with limited progress on the financial services sector. Although the European Commission wants to complete assessing the equivalence of the UK and European regulatory frameworks by the end of June, it is still awaiting answers to its clarification requests, while the UK continues to affirm its capacity to deviate from the European regulatory framework.

Against this backdrop, an AMAFI delegation, led by Chairman Stéphane Giordano, took part in a conference call with Almoro Rubin de Cervin, Director of General Affairs at DG FISMA, and his team. The purpose of the call was to present AMAFI’s priorities regarding the equivalence process for financial services (AMAFI / 20-29) and review the progress in Brexit negotiations.

The call provided an opportunity to stress the need to prolong the temporary equivalence of UK central counterparties in order to maintain market integrity and safeguard the ability of EU investment firms to keep providing customers with the same quality of service. AMAFI also reiterated the need for third-country branches of EU investment firms to be exempt from MiFID II STO/DTO trading obligations in order to preserve their competitiveness. While European Commission staff understand the importance of a pragmatic approach, exact implementation procedures are still being examined. Another issue raised during the exchange was the possibility that one of the first areas of divergence might be remuneration policies, with attendant impacts for the competitiveness of European firms