This month’s UK budget prioritised increasing London’s competitiveness in the absence of an equivalence deal with the EU
Proposals to make it easier to list in London and a reduction in bank levies will increase the financial regulation divergence between the UK and EU, potentially complicating the route to an equivalence deal. Budget proposals which will help London to become a more attractive place to list are likely to be implemented before the end of 2021. Changes include:
Hopes that the EU might offer some equivalence were raised when a financial services memorandum of understanding included wording about informal consultations on equivalence. France’s junior minister for EU affairs also indicated that there could be partial equivalence in the next few months. Although these Budget changes mean that the UK will start to diverge from the EU, this should not mean that equivalence will not be granted. Other third countries including the US have been granted equivalence with some divergence.