Don’t give up on equivalence, the UK boss of electronic trading platform MarketAxess says, just days after the UK’s chancellor appeared to do just that.
Christophe Roupie, who also runs the financial technology company’s Europe, the Middle East and Africa and Asia-Pacific businesses, told Financial News that time is running out for EU and UK policymakers to come to some agreement on equivalence — an EU regulatory regime which grants market access to non-EU firms deemed to be regulated in a sufficiently similar manner to their own.
“There is still time to waste,” he said. “For people to sit back and think there was time to negotiate equivalence… it’s not a joke.”
Securing equivalence decisions from Brussels would help to create an atmosphere of regulatory collaboration between EU and UK policymakers on issues that really matter to the financial services sector, Roupie said, citing the transition to sustainable finance and growth in environmental, social and governance investments by way of example.
“Collectively, we [the City] made a mistake” in not making clearer the benefits of securing a better outcome for the finance sector in Brexit negotiations, he said. “There were really high hopes around equivalence… We should have pushed harder.”
“I think equivalence would be a good way to say, ok, we can really help and support [each other on this], and that’s why I think I don’t really quite understand why we can’t reach a scenario where we are discussing [it],” he said.
His comments following scathing comments from Rishi Sunak, the UK’s chancellor the exchequer, on the lack of progress towards securing equivalence decisions for UK finance firms.
“Our ambition has been to reach a comprehensive set of mutual decisions on financial services equivalence. That has not happened,” Sunak told attendees at City’s annual Mansion House event on 1 July. In the absence of such access to EU markets, Sunak said that the UK would push ahead with its own regulatory reforms “as a sovereign jurisdiction with our own priorities”.
But Roupie was concerned about the ramifications of a possible bifurcation of market standards.
“The UK market is one of the deepest markets in the world. It would be good to try and keep a good working relationship [between it and the EU],” he said. “Otherwise, if you start to become asymmetric… I don’t think it is a good option.”
“[Finance firms now have] a purpose beyond just making money, which is saving the planet,” he said.
“I think that maybe we can all sit down and think about what we want to achieve with equivalence, which is to make markets again, probably less asymmetric, less disrupted, and maybe more aligned towards [that] goal,” he added.
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