On June 27, 2023, the EU and U.K. signed a Memorandum of Understanding on Financial Services Cooperation, a high-level agreement on future cooperation in the regulation of financial services. The MoU provides for:

• exchange of views between the EU and U.K. on regulatory developments and other issues of common interest;
• transparency and communication in adopting, suspending and withdrawing equivalence decisions;
• exchange of views between the EU and U.K. on market developments and financial stability; and
• enhanced cooperation and coordination, including in international bodies.

The MoU is not legally binding and does not commit the EU or U.K. to any harmonization of financial services rules and regulations. However, it would be the first and in practice a necessary step towards any broader equivalency framework between the EU and U.K. for financial services access, should that be desired. It anticipates the creation of a Joint EU-UK Regulatory Forum to aid cooperation in financial services. The Forum's areas of focus will include identifying concerns related to potential regulatory arbitrage and working towards compatibility of standards. The MoU is not intended to restrict the EU or U.K. from implementing any regulatory or supervisory measures that they individually consider appropriate. The first meeting of the forum is expected to take place in Autumn 2023, with meetings held at least semi-annually. The forum will primarily be attended by regulatory and governmental representatives, although other experts may be invited from time to time.

The MoU follows on from the Joint Declaration on Finance Services Regulatory Cooperation between the EU and UK, which was signed in December 2020.

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