The Financial Markets Law Committee has published its views on the legal uncertainties related to the future classification of the UK as a third country in respect of the EU. The purpose of the paper is not to make recommendations, but to highlight legal issues. The paper focuses on:
- activities for which there is no “equivalence” concept in current EU laws
- conditions for determinations of equivalence
- timescales for equivalence determinations and
- the impact of losing access rights.
FMLC is concerned to point out that none of the third country regimes EU law offers present anything close of comprehensive market access – it particularly notes the drawbacks of the regimes on retail investment and fund services, banking services and direct insurance.
The paper looks at many issues relating to access, but does not go into detail on how firms (both UK and EU) might deal with the much-discussed “cliff-edge”. It merely notes that a hard cliff edge would affect EU market participants as well as UK firms.
FMLC points out that a preliminary question is whether certain services actually amount to providing services into other EU jurisdictions at all, and therefore whether a passport has in fact technically been required to date. It notes the lack of clarity from the EU or ESAs on this, and many other, fundamental issues.