Continental Drift: Financial Services Regulation in the EU and UK

Post the UK’s departure from the European Union (EU), we entered a realm of UK/EU financial services regulation, which has lost its harmonised nature, which included relying on passporting rights across EU Member States. 

UK policy makers were now free to take advantage of their expanded rule making powers whilst the EU continued to chart its collective path. 

Since then, successive UK governments have called for policy makers to prioritise growth in the UK economy, while in the EU, the European Commission has launched the Savings and Investments Union, aimed at creating better financial opportunities for EU citizens, while enhancing the EU’s financial system’s capability to connect savings with productive investments. 

In this article we look at the current approaches to financial services regulation by the EU and UK, noting any divergence, and looking at whether emerging differences are progressing towards similar outcomes or different policy objectives. 

We look at the latest and planned regulatory developments in the EU and UK, impacting a variety of financial services firms. These include: 

• MiFID II/MiFIR;
• EU PRIIPS vs UK CCIs;
• EMIR;
• UCITS Directive;
• Eligible Assets Directive;
• Money Market Funds;
• AIFMD;
• ELTIF vs LTAF;
• Loan Originating AIFs;
• T+1; and
• Short Selling Regulations.

We also look at how the EU and UK have been managing divergence through the introduction of the Joint EU-UK Financial Regulatory Forum.