Regulators in Britain and the European Union said they have dusted off their no-deal Brexit agreements to avoid disruption in cross-border asset management.
Britain left the EU in January, but unfettered access to the European market has continued under a transition agreement that ends in December.
Negotiations of a new UK-EU trade pact have stumbled, and Britain’s requests for direct financial market access are being looked into separately by Brussels.
The European Securities and Markets Authority (ESMA) and Britain’s Financial Conduct Authority (FCA) said on Friday that memoranda of understanding (MOUs) drawn up in February 2019 in case Britain left the bloc without a transition deal “remain appropriate”.
They will now come into effect after the end of December, when the transition period expires, ESMA and the FCA said in separate statements.
One MoU allows for EU and UK regulators to swap information, a legal requirement for the continuation of “delegation”, or funds registered in EU countries like Ireland and Luxembourg outsourcing stock-picking to managers in London or elsewhere outside the bloc.
Delegation avoids the need to move portfolio managers to where the funds are domiciled.