Brexit has been a relatively smooth process in the financial sector thanks to the preparation of the financial industry and the cooperation of the EU and UK regulatory and supervisory authorities over the last few years.

Case-by-case equivalence arrangements are due to be the basis for future EU-UK relations, but so far only UK-based CCPs have benefitted from a temporary recognition of equivalence. Going forward the Memorandum of Understanding (MOU) in the process of being agreed between the EU and the UK should facilitate regulatory and supervisory cooperation between the two jurisdictions.

Now that firms have adapted to the new Brexit environment, there is however less demand on the industry side for reaching EU-UK equivalence agreements.

In addition, the insufficient predictability and alleged politicisation of these arrangements continues to be criticised by the industry, despite the improvements that were put in place in 2019 by the European Commission for enhancing their transparency.

Pending questions related to Brexit include the extent of future divergence between EU and UK legislations, as the UK reviews rules to adapt them to its needs and the future of delegation arrangements notably in the asset management sector. How the EU financial sector will evolve in the post-Brexit context and whether further initiatives are needed beyond the CMU and Banking Union for strengthening and further integrating the EU financial sector is a further question.