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The EUUK Trade and Cooperation Agreement (TCA) is a free trade agreement signed on 30 December 2020, between the European Union (EU), the European Atomic Energy Community (Euratom), and the United Kingdom (UK).
The EU passporting system for banks and financial services companies enables firms that are authorised in any EU or EEA state to trade freely in any other with minimal additional authorisation. These passports are the foundation of the EU single market for financial services.
The Brexit impact on UK financial markets Research by New Financial indicates that: Over 440 banking and finance organisations have left the UK and relocated to the EU. Approximately 10% of UK bank assets (totalling over £900 billion) have moved, or are in the process of moving, to the EU.
As a result, the UKEU Trade and Cooperation Agreement (TCA) contains few provision on financial services, leaving trade to be managed through mutual unilateral equivalence decisions. The two sides also signed a memorandum of understanding (MoU) on regulatory co-operation in March 2021.
Brexit. In 2019, 40% of UK financial services exports went to the EU. As part of the European single market, the UK enjoyed substantial market access in financial services to the rest of the EU through a system known as passporting.