A draft document on the EU negotiating position, seen by the Financial Times newspaper, revealed that the United Kingdom's future market access would depend on "equivalence" rules, used by non-EU countries to enter the bloc's financial services market. As underlined in the document, the equivalence regime entails that the European Commission unilaterally grants access, while reserving the right to withdraw it, the newspaper reported.
READ MORE: Brexit Transition Deal is 'Total Betrayal' by UK Government — Deputy UKIP Leader
In certain cases, the European Union may recognize the regulatory or supervisory regime of non-EU countries as equivalent to the corresponding EU regime. For example, in December the European Commission adopted an equivalence decision on Swiss share trading venues, allowing them to operate without any market disruptions.
In early March, UK Chancellor of the Exchequer Philip Hammond said London had not ruled out the possibility of using the equivalence model in regulation of financial services with the European Union after Brexit, but stressed that the model where Brussels can withdraw access "would not work."
