22 In addition to the impact on the banking sector, Brexit is expected to have long-term consequences for London as a trading centre for euro-denominated derivatives. This is currently an important activity for London, where it is estimated that 80-90% of euro-denominated derivatives are currently traded: the daily volume of transactions can exceed $900 billion. , the great trading of derivatives within the competence of the European Union and, ultimately, the euro area. This could create high tensions between the UK and the EU as they negotiate a future trade deal. However, the transfer of derivatives trading to the euro area will not be easy. It carries risks of financial instability and will most likely lead to an increase in the cost of financial transactions for European borrowers (governments, businesses and households). This briefing examines the functioning of the EU`s cross-border services regime under the Financial Instruments Markets Regulation (MFIR) and the impact of the European Commission on British businesses if the European Commission makes an equivalency decision vis-à-vis the UK under the MFIR, including the impact of changes to MFIR from June 2021. It also examines the impact on EU businesses if the UK makes an appropriate equivalency decision for the EU under the “onshored” MiFIR, which is part of UK law after the end of the Brexit transition period. The briefing was carried out in collaboration with UK Finance. We have also published a report on the use of the Bank`s and THE PRA`s sub-delegated powers under the European Withdrawal Act (2018). The Ministry of Finance presented this report to Parliament on September 17.

The Bank and the PRA must present this report to Parliament each year when they exercise the corresponding sub-delegated powers. This is the case for the fiscal year ending February 29, 2020. In qualifying for the exemption, the British company must demonstrate that it is licensed and monitored in the United Kingdom for the services it wishes to provide in the Netherlands. 33This is not bad news. The British economy has long been distorted by the considerable importance of financial services and the London area.