7. Technical equivalence decisions related to the PRA
Some EU financial services legislation, including the CRR, Solvency II and European Market Infrastructure Regulation (EMIR), contain provisions which allow the European Commission to determine that a non-EU country (“or third country”) has a regulatory and supervisory regime that is equivalent to the EU’s corresponding regulatory framework. These equivalence provisions have been retained in UK law by virtue of the European Union (Withdrawal) Act 2018, and HM Treasury has been transferred this European Commission power to make certain equivalence decisions on behalf of the UK.
The majority of existing equivalence determinations made by the European Commission, have also been retained in UK law. This means that these equivalence determinations will continue to apply in the UK after the end of the transition period, ensuring continuity. On Monday 9 November 2020, HM Treasury announced a package of equivalence decisions in respect of the EEA. These equivalence decisions will come into force at the end of the transition period. The full list of equivalence decisions made in respect of the EEA is available on HM Treasury’s website.
HM Treasury has published a list of equivalence determinations which are in force in the UK as at the end of the transition period.
Further information about the UK’s equivalence, including the respective roles of HM Treasury and the UK regulatory authorities, is contained in HM Treasury's Guidance Document for the UK's Equivalence Framework for Financial Services. On Thursday 17 October 2019, HM Treasury, the Bank of England, and the FCA also published a Memorandum of Understanding (MoU) setting out how the parties expect to coordinate their respective functions in relation to equivalence and exemption determinations.
This framework does not apply to the PRA’s existing approach to authorising and supervising international bank branches as described in Supervisory Statement (SS)1/18, and insurance branches, as described in SS2/18.