The UK has signed a tentative deal with the European Union (EU) to provide domestic financial service providers continued access to European market following Brexit, reported The Times.
Citing government sources, the report stated that both the parties agreed on all key aspects of future partnership including information sharing.
It added that the deal will enable UK companies to operate across the European markets till the British and EU financial regulations are aligned.
As the UK is set to leave EU in March next year, all the major global banks with operations in the country had to restructure their operations.
Many financial companies have set up new hubs and moved their staff to new locations, as a part of this reorganisation.
Under the current system, EU allows foreign banks and insurers access to the European market when they are guided by similar financial regulations.
The system, known as ‘equivalence’, until now had limited implementation as the access can be withdrawn with a month’s notice.
The new deal extends this equivalence to allow the UK and the EU to consult each other before implementing new regulations, stated the Times report.
On the other hand, UK is also taking multiple steps to ensure a smooth transition during Brexit.
Last month, Bank of England directed the UK banks to increase their capital buffers to ensure smooth transition and reduce associated risks in case of a no-deal Brexit.