Office lights are on at dusk in the Canary Wharf financial district, London, Britain, January 9, 2017. REUTERS/Dylan Martinez
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If passporting is off the table, the U.K. may have to fall back on equivalence, which can give companies based outside the EU privileged, though targeted, market access.What's Equivalence?Equivalence refers to the European Commission's recognition that a non-EU country's rules and oversight of specific business lines are as tough as its own. main difference between passporting and equivalence is that one is a right, the other a privilege.Equivalence can be withdrawn at short notice, would probably cover fewer services, and may mean the U.K. will have to accept rules it has no say over. equivalence talks take?While the EU's equivalence talks with the CFTC were successful, they dragged on for nearly four years even though they involved "one tiny subset of the whole financial services sector landscape," as Jonathan Hill, the EU's former financial services chief, said in June.Citigroup analysts including Andrew Coombs wrote in a Jan. 11 report that the U.K. would likely try to negotiate an "equivalence plus" agreement with the EU. This would extend the equivalence principle to services not currently covered by third-country access provisions in the bloc's financial services acts.More than 8,000 companies registered in Europe access the U.K. in a similar way.
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