The Association for Financial Markets in Europe (AFME) has asked Britain and the European Union (EU) to settle a dispute over financial market access. This move comes after the post-Brexit trade talks were halted last week.
Britain left the EU in January 2020. However, it continues to have full access to the trade bloc until the transition period ends in December.
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The post-Brexit trade talks involved assessments on the financial market access, which had a deadline of 30 June.
However, London and the EU blamed each other for missing this deadline.
AFME said that if there is no agreement between the two over the EU financial market access, the pandemic may make it even more difficult to cope with potential disruption.
Direct access to the EU market may depend on whether the EU finds the UK regulation to be “equivalent” to bloc standards.
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By GlobalDataIf there is no equivalence, EU investors cannot use financial services in London.
EU’s chief Brexit negotiator Michel Barnier said: “We will only grant equivalences in those areas where it is clearly in the interest of the EU, of our financial stability, our investors and our consumers.”
For EU investors to continue using clearinghouses to avoid customers having to move their derivatives from London to elsewhere, an agreement must take place before September end.
The banking lobby said that two-way access in-stock and derivatives trading are also needed to avoid disruption.
In a statement, AFME said: “Covid-19 has the potential to disrupt Brexit planning including impacting client readiness, as well as potentially affecting the ability of firms to relocate staff to other jurisdictions.
“This is particularly important in the context of the fast-evolving legislative agenda in the EU and the UK with a number of significant financial services files being proposed, due to be implemented, or under review in the second half of this year and the first half of 2021.”
