9 May 2022
Thank you once again for the opportunity to speak to the Committee on 8 February, as part of your inquiry into the future of financial services after Brexit.
Further to your recent discussions with my policy team, I am writing to provide further clarification and evidence in the three areas identified.
To confirm the last time equivalence was granted between the UK and another country.
February 2021 was the last time equivalence was granted between the UK and another country. This was for Switzerland in relation to its Share Trading Obligation.1
The European Commission’s List of equivalence Decisions states all equivalences granted as of February 2021.
The latest equivalence decision the EU granted was on 8 February 2022, extending the temporary equivalence granted in respect of the UK's supervisory framework for central clearing counterparties (CCPs) by three years, until 30 June 2025: Commission Implementing Decision (EU) 2022/174.
Prior to this, the most recent group of equivalence decisions taken in 2021 relate to EMIR (after the end of the UK's post-Brexit transition period):
Commission Implementing Decision (EU) 2021/1103 of 5 July 2021
Commission Implementing Decision (EU) 2021/1104 of 5 July 2021
1HMT Policy paper, Table of UK Equivalence Decisions, 14 January 2021, found at: https://www.gov.uk/government/publications/guidance-document-for-the-uks-equivalence-framework-for- financial-services
Commission Implementing Decision (EU) 2021/1105 of 5 July 2021
Commission Implementing Decision (EU) 2021/1106 of 5 July 2021
Commission Implementing Decision (EU) 2021/1107 of 5 July 2021
United States of America
To provide clarification on the discrepancy Lord Purvis noted in figures TheCityUK had quoted and those seen in a HoC Library briefing paper.
We note Lord Purvis quoted from a House of Commons (HOC) Library briefing paper which said:
“Financial service exports to the EU have continued to fall in 2021, falling by 5% between Q4 2020 and Q1 2021 and by a further 5% between Q1 and Q2 2021. Compared to 2019 and pre-covid levels of trade, financial services exports to the EU were 31% lower in Q2 2021 than Q2 2019.”
In response to the figures quoted:
2020. However, the paper states “In 2020, exports of financial services to the EU were worth
trading more now with other economies like the US, for example: “Financial services trade is conducted primarily with other advanced economies. The US is the largest single destination for the UK’s financial services exports, accounting for 34.2% of total financial services exports. As a bloc, EU Member States accounted for 30% of total sector exports.”
To provide information on which specific sector(s) have driven the headline reduction in the number of jobs in financial and related professional services (FRPS).
On FRPS employment:
UK Employment Financial Services
UK Employment Related Professional Services
I hope this information has been helpful. If TheCityUK can support the Committee in any other way, please do not hesitate to get in touch.
Chief Executive I TheCityUK