BoE, FCA, HM Treasury, and PRA published a Memorandum of Understanding (MoU) that sets out how they expect to coordinate their respective functions in relation to equivalence and exemption determinations post Brexit. These are new functions that will be transferred to UK authorities in the context of Brexit and will come into effect from the exit day. The MoU has been established in accordance with Regulation 6 of the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (the Equivalence Regulations).
The Treasury is responsible for determining the equivalence and the application of exemptions to any country or territory outside the UK (third country), where such a function is provided for in legislation. The Treasury may make determinations that are partial, time-limited, or subject to other conditions. BoE, FCA, and PRA are responsible for providing support to the Treasury for matters related to their regulatory functions. This includes the provision of information or advice to the Treasury in connection with any consideration of a new equivalence or exemption determination. The regulators are also responsible for recognizing third-country firms that operate in UK under an equivalence determination, where this is provided for in legislation. The regulators will provide advice in relation to their regulatory functions; however, when advice is requested on areas of joint competence (for example, capital requirements), the lead regulator should provide the advice after consulting the other regulator. In some cases, the regulators may provide advice on different aspects of a determination, according to their functions.
Keywords: Europe, UK, EU, Banking, Insurance, Securities, MoU, Equivalence and Exemption, Brexit, HM Treasury, Equivalence Regime, Third Country, FCA, PRA, BoE
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