By Huw Jones
LONDON (Reuters) – France’s stock markets watchdog, the AMF, said on Wednesday that it expects Britain to take advantage of Brexit to deviate from European Union financial rules in an effort to make the City of London be more attractive to investors.
The City has been largely isolated from the EU, as Brussels has yet to decide on the degree of direct access it will grant the UK for its financial services, a sector not covered by the post-Brexit trade deal.
UK access to EU markets will depend on whether Brussels considers British financial rules to be sufficiently “equivalent” or aligned with those of the 27-state bloc. This is made more difficult by divergences on both sides.
“I obviously see a growing divergence between the UK and the EU27, but I think that is quite normal,” said AMF general secretary Benoît de Juvigny at a conference held by the International Swaps and Derivatives Association (ISDA, for its acronym in English).
“The UK wants to take advantage of its new autonomy and try to develop its own financial center, its own financial market, and the EU is attached to its sovereignty and wants to develop its own financial services,” he said.
The bloc’s Commissioner for Financial Services, Mairead McGuinness, told the ISDA conference on Tuesday that the equivalency would not be granted if there was a “wide divergence” in the rules.
Separately, France reported on Wednesday that it will delay the implementation of any EU cooperation agreement with the UK in the area of financial services until the country grants European fishermen fair access to its rich fishing waters.
Lack of international access has forced much of the euro-denominated derivative transactions to leave the City for the EU and New York, putting French and other EU bank branches in London at a disadvantage.
“I really think it is a bad solution. I hope that the EU authorities will find a different solution in the future,” de Juvigny said.
(Information from Huw Jones, edited by Jane Merriman and Gareth Jones, translated by Darío Fernández in the Gdansk newsroom)