The protection of citizens needs to be put first in the elaboration of a future regulatory cooperation for financial services after the UK’s withdrawal from the EU. In its briefing note „Preparing for a future UK-EU trade relationship“, Finance Watch presents its recommendations on how to ensure a high level of protection for citizens and to help reduce risks to financial stability:
- Proper preparations: In case the Brexit deal that is currently on the table will not pass the EU and UK Parliaments’ votes, proper preparations must be taken by both governments and companies to ensure that citizens are not negatively impacted by Brexit.
- Orderly concluded negotiations: The EU and the UK should establish a withdrawal period of at least 5 years, to allow the negotiations on withdrawal and future cooperation to be properly concluded.
- Constructive collaboration: A framework for regulatory cooperation should be put in place to enable practical cooperation that respects the principles of the EU internal market. This framework should ensure that commonly agreed rules for financial companies are carefully enforced, supervised and developed through close cooperation and sufficient mechanisms for arbitration.
- Fundamental protections for citizens: This framework should be based on a minimum set of mutually agreed fundamental protections that exist in the current shared EU financial regulatory framework. This list of protections should aim to cover the following areas:
- Prudential rules in line with the current levels of protection under the EU banking package, Solvency II, MiFID II, EMIR, CCCTB/ CCTB and FiCoD.
- Conduct of business rules in line with the current levels of protection under the EU market abuse directive, prospectus directive, consumer credit directive, mortgage credit directive, distance marketing directive, MiFID II, IDD and the GDPR.
Short video summary of the report by its author Paul Fox: