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Ministerial equivalence and exemption directions in financial services for the European Union and the European Economic Area

The Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (S.I. 2019/541), includes a power for ministers, for up to twelve months after exit day, to make equivalence directions and exemption directions for the European Union and EEA member states.

I have today laid before Parliament ministerial directions which exercise the power in 4 specific areas, to help ensure that the UK will have a functioning regulatory regime for financial services in all scenarios.

The first direction determines that the EU-adopted International Financial Reporting Standards are equivalent to UK accounting standards and can continue to be used, for example, to prepare financial statements for requirements under the Transparency Directive, and to prepare a prospectus under the Prospectus Directive. This delivers on a commitment made by the government in November 2018.

HM Treasury, the European Union and the EEA European Free Trade Association countries have decided to provide exemptions for central banks and certain public bodies under certain prudential regulations in the area of financial services in the event that the United Kingdom leaves the European Union without an agreement. Therefore, directions have been made exempting these EU and EEA bodies from certain requirements under UK law in force after exit.

These measures are important for avoiding disruption to the financial services sector, and the businesses and individuals relying on it, in the event that the United Kingdom withdraws from the European Union without an agreement.

Copies of the directions are available in the Vote Office and Printed Paper Office and will be published alongside the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 on Legislation.gov.uk.