services to clients, as per the Markets and Financial Instruments Directive. On first appraisal, the third country equivalence regime may be considered as a direct substitute for the existing ‘passport’ arrangement that the UK enjoys as an EU member state. It is clear that the day the EU leaves the European Union, the domestic legislation that exists in the UK will, by virtue of the country’s previous EU membership, be compatible with EU law. Pursuant to this point, this essay will analyse the impact of Brexit on British financial services, with specific reference to the third country equivalence regime.

As already argued, contrary to the beliefs of many commentators, there is strong potential for Brexit to create opportunities in the UK. The UK will have greater autonomy over how it regulates financial services and will be able to continue to innovate, such as with its Senior Managers Regime and with FinTech. Indeed, the opportunities that the latter presents have been well documented: “recognising the opportunities that FinTech provides for the City, particularly in a post-Brexit context, UK regulators have been pioneers in developing a progressive approach in recent years”. This is something the essay will examine, in conjunction with the overall impact of Brexit on existing UK financial services legislation.

Amongst academic, commentators and politicians, virtually the only source of consensus on the subject of Brexit is that the ultimate outcome remains uncertain. The post-Brexit model that will be negotiated and adopted between the EU and the UK will ultimately determine the impact. In spite of this, assessments can still be made and, in light of this, there is a strong argument to suggest that a loss of passporting rights will affect the UK more seriously than countries that remain within the EU/EEA , and that whilst the third country equivalence regime may provide continuity in certain financial services sectors, many financial services sectors do not have equivalence regimes. Furthermore, some existing equivalence regimes are rejected as unsuitable by industry bodies, such as in private equity and venture capital and, therefore, do not present an optimal replacement for the existing ‘passporting’ scheme. Lastly, in spite of the plethora of problems that Brexit undoubtedly presents, it will not impact existing UK legislation and it will enable to the