Title: Third-Country Equivalence and Access to the EU Financial Markets Including in Case of Brexit
Abstract: After Brexit, the UK will become a third country.In the absence of a transitional agreement, its access to the European Union (EU) markets will be conditioned on meeting the condition of 'equivalence of regulation and supervision' as laid down in many EU regulations.The regime applicable will be the same as that of all third countries, as has been applied in many fields.Several other approaches may apply, but equivalence is one of the more efficient and less costly ones.In many cases, the key to equivalence lies formally in the hands of the Commission: the absence of a formal equivalence Commission decision may constitute a serious obstacle, in this case, to the UK continuing to offer financial services on the EU markets.If transition agreements are insufficient, a last minute opening of the markets on the basis of the equivalence regime may offer a provisional solution. I. BREXIT AND THE EQUIVALENCE OF REGULATION AND SUPERVISION1. Equivalence as a regulatory condition for obtaining access to the EU Within the context of the UK leaving the European Union (EU), access to each others' financial markets will become a point of crucial importance.If no transitional measures are adopted, the UK will lose the benefit of the Treaty freedoms, in this case, the freedom of establishment and the freedom to provide services throughout the EU.Reformulated in EU terminology, the UK will become a 'third country' , which could only obtain access to some of the EU markets, provided it would meets certain criteria specified in each of the numerous directives or regulations.Among these conditions, the European Commission's (Commission) decision-or absence of decision-that the third-country's legal and supervisory system is 'equivalent' to the EU's will often constitute the core condition for obtaining access to EU markets.This concept would play a central role in the absence of specific agreements between the EU and the UK, in the absence of which-the so-called hard Brexit-most financial services relations would come to a standstill.