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On 19 May 2023, the European Union (EU) and the United Kingdom of Great Britain and Northern Ireland (UK) published a Memorandum of Understanding establishing a framework for financial services regulatory cooperation (MoU), which was agreed in advance by the parties.

Authors: Felicitas Scriba, Selin Cengiz-Kilic

The primary objectives of the MoU are to maintain financial market stability, promote market integrity and ensure investor and consumer protection. The associated need for regulation resulted from the UK's withdrawal from the EU.

In order to be able to achieve these goals, the Memorandum of Understanding provides for the following:

  • A bilateral exchange of views and analysis on regulatory developments and other issues of common interest
  • Transparency and appropriate dialogue on the adoption, suspension and withdrawal of equivalence decisions
  • A bilateral exchange of views and analysis on market developments and financial stability issues
  • Enhanced cooperation and coordination, including in international fora where appropriate

The MoU provides for the establishment of a joint EU-UK Financial Regulatory Forum consisting of members of the EU and the UK to serve as a platform for cooperation in the area of financial services. Through biannual meetings, it will facilitate stocktaking, review joint progress, and work on further regulatory issues related to the financial sector. Where appropriate and in line with existing policy and law, the EU and the UK should seek to identify potential cross-border implementation issues in a timely manner in order to prevent them. In this regard, the Forum may avail itself of representatives of relevant financial regulatory, supervisory and resolution authorities. In its activities, the Forum will focus on the necessary means and regulations in favour of cooperation in financial services, but the body will neither have direct influence on the different jurisdictions nor the ability to take regulatory, supervisory or other legal measures contrary to the opinion of the cooperators. Thus, the Forum's joint discussions will not lead to any direct restrictions.