ESMA Issues Opinion On Supervisory Convergence

The European Securities and Markets Authority ("ESMA") released an opinion today on supervisory convergence in the context of the UK withdrawing from the European Union ("EU"). The opinion is addressed to national regulators, and contains nine principles for national regulators to follow when authorising and supervising firms that are seeking to re-locate in the EU from the UK. ESMA has issued the opinion in anticipation of UK firms establishing EU offices to maintain access to EU passports and financial markets and relying on outsourcing or delegation arrangements to UK-based affiliates. ESMA gives its opinion on the basis that the UK will be a "third country" (i.e., no longer part of the EU) after its withdrawal from the EU, without reference to any bespoke arrangement on financial services that may be agreed between the UK and the EU.