Welcome to the August 2019 edition of our monthly update from the Asset Management & Investment Funds team.
In this month's edition we look at how the EU's taking stock of its approach to equivalence along with other topics of interest to the asset management and funds industry.
As the latest Brexit deadline of 31 October draws near, it is perhaps telling that the EU has chosen now to publish a paper outlining its current and proposed approach to the recognition of third country regimes as equivalent to that operated under EU law, an approach referred to as equivalence and the main EU approach to facilitating cross-border activity and access for third country firms to the EU market.
EU declarations of equivalence have been cited by the UK as a solution to issues arising from the UK becoming a third country following its exit from the EU. A positive assessment by the EU of a third country framework enables the third country to access the EU market on the basis of reliance by the EU on third country rules and the work of the third country supervisor. The Paper however, which signals a move towards a more systematic and risk-based EU approach to equivalence with enhanced monitoring and oversight, would appear to underline the difficulties which may be faced by third countries who seek to rely on equivalence decisions as a permanent solution to EU market access..