Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of (1) the political agreement reached by the European Parliament and member states on 26 February on the Capital Markets Union, and (2) whether UK investment firms' access to EU markets could be restricted if the UK leaves the EU without a deal.

On Tuesday 26^th February, European policy-makers reached a political agreement on the Investment Firms Review (IFR) which is part of the Capital Markets Union.

The Government welcomes the agreement as it supports a more proportionate regulatory regime, upholding market integrity and financial stability, and which will also benefit the industry and ultimately the wider economy.

After the UK’s departure from the EU, EU market access for UK investment firms will be dependent on a positive equivalence determination from the EU. The European Commission has said that in a no deal scenario, it will prioritise financial stability and the EU’s own interests. However, as the Economic Secretary said on 12 February^[1],we can see no reason why the UK and the EU would not be able to find each other equivalent in any scenario. We leave with the same rulebook and both have third country equivalence frameworks to support cross-border activity.

[1] https://hansard.parliament.uk/commons/2019-02-12/debates/0689c6cb-2bc5-4e53-a4f7-e2b3ecb2fa8f/DraftEquivalenceDeterminationsForFinancialServicesAndMiscellaneousProvisions(AmendmentEtc)(EUExit)Regulations2019