The proposed Covered Bonds Directive and the related proposal to amend the CRR illustrates the issues Brexit poses. Covered bonds by EU issuers are treated favourably under the CRR. UK issues account for only 6% of the EU market, but the status of the 6% issued by UK issuers will change – subject to any grandfathering which may be agreed – and post-Brexit, UK covered bonds will, as it stands, not qualify for the same favourable treatment as EU27 ones, because the proposed Directive has no equivalence’ provision; it simply requires the EC to assess, within the first three years, “whether a general equivalence regime for third-country covered bond issuers and investors is necessary or appropriate”. This is the same approach as under Article 46 of the Securitisation Regulation, the EC not wanting to pre-empt the political Brexit process. The UK Government’s suggested post-Brexit mutual recognition arrangement would of course be relevant.