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Eversheds Sutherland Financial Services: A new transatlantic gold standard? Session 1/5

  • United Kingdom
  • Brexit
  • Financial services


20 January 2021 -  HM Treasury

Please click here to view the PDF version of this article
A series of five webinars exclusively for clients held under the Chatham House rule through January and February 2021 looking at a potential deal to support a closer US-UK trading relationship in financial services is summarised below


Our series of webinars opened with a “fireside chat” with HM Treasury. The discussion covered the following key issues:

  • The Global Financial Partnership Strategy led by HM Treasury
  • How the UK will navigate financial services regulatory change post-Brexit
  • The US as a priority financial services trading partner
  • The role of HM Treasury in the trade negotiations and related forums
  • The new US Administration and its likely impact on UK/US negotiations

Summary of discussion

Genesis of the Global Financial Partnership Strategy

The objective of the Global Financial Partnership Strategy Group is to deliver on the policy introduced by Phillip Hammond in his 2018 speech. It is about developing UK relationships with key partners in the financial services sector, and fostering these relationships to minimise market fragmentation and to increase cross border financial trade. The broad policy objectives include supporting innovation, resilience and openness in the financial services sector.

Since leaving the EU, the UK has had to ask itself big questions about its objectives and identity when formulating financial services policy. HM Treasury takes a strategic view on how the UK should align itself with key advanced markets and what it can do to ensure that the UK continues to be seen as a leader in global financial services policy as well as a being a leading venue for global financial services activity.

Key markets in the Global Financial Partnership Strategy

Switzerland, Japan, Singapore and the US are amongst the key markets identified. The UK is working towards broad mutual recognition with Switzerland which will further promote wholesale financial services on a cross border basis, and which will likely go much further than what has been possible in the past. The UK has successfully renegotiated a trade agreement with Japan with an additional regulatory annex which amongst other things creates a robust framework for future co-operation.

The journey towards a Memorandum of Understanding (“MOU”) with the EU

The UK did not get a mutual commitment to establishing structural cooperation with regards to financial services regulation, however there is a timeline and aim of achieving an MOU with the EU by March 2021. This will create the framework for equivalence discussions but those discussions are likely to move forward slowly.

Reviewing onshored legislation

The process of onshoring EU laws has provided UK firms with certainty in the short term. Now HM Treasury have the opportunity to review this framework focusing on developing evidence-based policies while respecting openness and achieving financial stability. The call for evidence in respect of the Overseas Framework is an important step in this process. This explores issues such as the overseas persons’ exclusions and the recognition of overseas exchanges. Practitioners are  encouraged to respond to that consultation which is open until 11 March 2021.

Focus on the US

The US is the UK’s biggest financial services trading partner. There are many US firms present in the UK, and HM Treasury works with the US closely on setting global standards. There are a lot of shared values between the US and the UK and HM Treasury is keen to build on the existing relationship.

The US-UK Financial Services Regulatory Working Group (“FRWG”) which is a technical forum established in 2018 brings together the Bank of England, the Securities and Exchange Commission, the Financial Conduct Authority, the US Treasury, the Commodity Futures Trading Commission, and the Federal Reserve as well as other regulators, and continues to be an important platform for discussion. The FRWG is a venue for regulators to talk about policy issues and to horizon scan with the aim of increasing market access and minimising market fragmentation between the two jurisdictions. Recent discussions have included the response to the Covid-19 crisis, green finance, fintech, cybersecurity and the management of disruption and divergence in the financial services sector. The Financial Innovation Partnership has an equally important role to play.

As the wider trade negotiations continue, the FRWG will continue to meet and does not require a new mandate to initiate or continue conversations. Any financial services provisions in a future trade agreement will therefore catalyse what is already an ongoing partnership.

The Biden Administration

Any change in presidency takes take time to bed in.

The trade negotiations have progressed positively to-date, and are in a good position to be taken forward with the new Administration. There are also opportunities in the area of green finance where President Biden has a different approach to his predecessor.


Agreements relating to data sharing are key and the work which is being done in connection with that chapter of the trade negotiations is very important for financial services. There was significant success in this regard in the Japan trade agreement so it might be expected that this topic will be resolved satisfactorily in the US negotiations in due course.

To revisit the webinar summaries, please click below:

3 February 2021 - Lisa Vainio, TheCityUK

10 February 2021 - Peter Matheson, SIFMA

17 February 2021 - James Flannery, HM Treasury 

24 February 2021 - Lord Grimstone, HM Treasury

To read our dedicated briefing on the US-UK negotiations, please click here