Not a Return to the Single Market, but a Deal on Clearing, Data and Mobility: UK Finance Maps a Three-Stage Reset With Brussels

A decade after the Brexit referendum, Britain's banking and financial services trade association has published a blueprint for rebuilding the UK-EU financial services relationship — not through treaty renegotiation, but through incremental, technical alignment that begins with clearing house equivalence and ends, on a long-range view, with a bespoke financial services treaty.

The report, produced in partnership with law firm Freshfields and based on interviews with banks from the UK, EU and third countries, embassy officials, think tanks and trade associations, lays out a three-stage roadmap. The short-term priorities, achievable within two years, focus on closer regulatory coordination and removing specific legal uncertainties that affect market access. Two items are singled out: granting non-time-limited equivalence to UK central counterparties, the clearing houses that sit at the centre of derivatives markets, and removing the sunset clause from the EU's data adequacy decision on the UK, which currently leaves cross-border data flows contingent on a renewable political determination.

Without permanent CCP equivalence, UK clearing houses face the risk that their EU-facing business becomes subject to periodic regulatory review cycles that complicate long-term capital allocation. Without a permanent data adequacy finding, banks, insurers and asset managers operating across the Channel face the prospect of having to restructure their data architecture if the decision is allowed to lapse. The report frames both as fixable, near-term problems whose resolution would unlock confidence for more ambitious steps.

Mobility and a competitiveness lab

The medium-term agenda, covering the next four years, shifts to structural questions. The report calls for a UK-EU mobility agreement for skilled professionals, explicitly modelled on the UK-Switzerland Services Mobility Agreement, which permits Swiss professionals to work in the UK and vice versa without full visa sponsorship. For banks and law firms that move staff between London and continental offices, the post-Brexit immigration regime has added cost and processing time; a sectoral mobility pact would reverse part of that friction.

On the regulatory side, the report proposes a joint UK-EU "competitiveness lab" and a shared regulatory sandbox — mechanisms that would allow financial firms to test innovative products under coordinated supervision rather than navigating two separate authorisation processes. The lab concept is designed to address a competitive concern: that both the UK and EU are individually seeking to attract fintech and green finance activity, but are losing ground to jurisdictions that can offer a single, large regulatory perimeter.

The long game: a Berne-style treaty

The third and most ambitious stage envisages a future treaty modelled on the UK-Switzerland Berne Financial Services Agreement, which provides mutual recognition of each side's regulatory frameworks in specific areas of financial services. UK Finance also floats the idea of a deeply integrated capital market spanning the UK, EU, European Economic Area and European Free Trade Association — a concept closer to a pan-European capital market union than to bilateral equivalence.

Kerstin Mathias, UK Finance's director of international affairs, was explicit that the roadmap does not imply rejoining the Single Market. "The EU is a sophisticated bloc pursuing its own ambitious agenda and the UK, likewise, has its own regulatory framework, policy priorities and global commitments," she said. "But the two highly connected economies can achieve more where we cooperate. The question is not whether to work together, but how to do so more effectively."

The report was published ahead of the upcoming UK-EU Leaders' Summit, with the explicit aim of placing financial services on the agenda for the political reset. It is, in effect, an opening bid from the City — not for reintegration, but for a structured, sequenced negotiation that begins with the clearing and data questions on which both sides have a mutual interest in stability, and builds from there.