On 31 December 2020, the United Kingdom’s (UK) transitional period for leaving the European Union (EU) has ended. The UK is considered to be a third country that is not subject to the EU law.
From 1 January 2021, the relations between the UK and the EU (hereinafter - the Parties) are defined by the EU-UK Trade and Cooperation Agreement concluded by the Parties on 24 December 2020. Same as the EU’s free trade agreements with third countries, the EU-UK Trade and Cooperation Agreement includes provisions on financial services. In the agreement, both Parties undertake the following:
- To keep their markets open to each other’s operators that wish to provide services by establishing their undertakings.
- To ensure that financial services sector standards agreed on the international level are implemented and applied in their territories.
- To seek to agree on the Memorandum of Understanding that establishes the system of cooperation in the area of financial services regulation by March 2021.
Moreover, the Parties reserve the right to adopt or continue to apply measures dedicated to prudential objectives, for example, to maintain financial stability and integrity of financial markets.
For more information on the concluded EU-UK Trade and Cooperation Agreement, see the European Commission website.