Equivalence: Difference between revisions
imported>Doug Williamson (Create the page. Sources, The Treasurer, September 2016, p50 and EC Europa http://ec.europa.eu/finance/general-policy/global/equivalence/index_en.htm) |
imported>Doug Williamson (Add quote from The Treasurer March 2017, p12.) |
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The significance of the equivalence concept, for UK financial services, is that the UK might choose, post-Brexit, to keep its regulatory regime closely aligned with the EU regime, in order to benefit from the possibility of equivalence. | The significance of the equivalence concept, for UK financial services, is that the UK might choose, post-Brexit, to keep its regulatory regime closely aligned with the EU regime, in order to benefit from the possibility of equivalence. | ||
<span style="color:#4B0082">'''''Equivalence and passporting'''''</span> | |||
:"In brief, equivalence is the willingness of one regulator to accept that another regulator's rules achieve the same regulatory outcomes as their own, and so some element of cross-border activity can be allowed. | |||
:Equivalence must be agreed, but is subject to negotiation, market by market. | |||
:Passporting is the acceptance that once permitted to trade in one state, a business can trade in another without further compliance requirements." | |||
:''The Treasurer magazine, March 2017, p12 - Technical briefing.'' | |||
Revision as of 10:48, 13 March 2017
European Union (EU) regulation.
In certain cases the EU may recognise that a non-EU legal, regulatory and/or supervisory regime is 'equivalent' to the corresponding EU framework.
That recognition, in turn, means authorities in the EU may rely on supervised entities’ compliance with the equivalent non-EU framework, and allow the entity to operate more freely than it might otherwise be able to (without equivalence).
This approach is designed to bring benefits to both the EU and third-country financial markets.
The significance of the equivalence concept, for UK financial services, is that the UK might choose, post-Brexit, to keep its regulatory regime closely aligned with the EU regime, in order to benefit from the possibility of equivalence.
Equivalence and passporting
- "In brief, equivalence is the willingness of one regulator to accept that another regulator's rules achieve the same regulatory outcomes as their own, and so some element of cross-border activity can be allowed.
- Equivalence must be agreed, but is subject to negotiation, market by market.
- Passporting is the acceptance that once permitted to trade in one state, a business can trade in another without further compliance requirements."
- The Treasurer magazine, March 2017, p12 - Technical briefing.
