On 20 August 2018, the UK Government published a document, in the form of a presentation, dated 25 July 2018, entitled "Framework for the UK-EU partnership - financial services". The document follows on from the White Paper on the future relationship between the UK and the EU, which was published on 12 July 2018. The framework contains three parts: context (part I), proposed model (part II) and conclusion (part III).
The framework says that the new, bilateral economic and regulatory arrangement would have three pillars, which are all discussed further in the presentation document:
- common principles for the governance of the relationship: the UK-EU arrangement should include common objectives to manage shared interests such as financial stability, investor protection, market integrity, and the prevention of regulatory arbitrage;
- extensive supervisory co-operation and regulatory dialogue: the UK proposes that the UK and the EU would commit to an overall framework that supports extensive collaboration and dialogue;
- predictable, transparent and robust processes: to give business the certainty necessary to plan and invest, transparent processes would be needed to ensure the relationship is stable, reliable and enduring.
The document concludes by saying that the three key takeaways are:
- autonomy of decision making: this proposal fully respects each side’s autonomy of decision-making, addressing challenges and concerns around the sovereignty of decision making. The bilateral commitments envisaged do not constrain each side’s discretion, but rather ensure that change can be managed effectively;
- the bilateral component is critical: it should be commensurate to the UK/EU relationship and degree of market integration, it should address key gaps in scope, set out institutional cooperation and use consultation and mediation to explore solutions and agree timescales appropriate for the scale of changes before they take effect;
- cross-border co-operation matters: for EEA firms doing business in the UK and for supervisors, the UK has no desire to water down existing co-operation. There is no need to default to a world with less predictability about how the two sides will share information, and co-operate day-to-day and in crisis.