What is an equivalence agreement?

An equivalence agreement refers to a financial services agreement negotiated between the EU and a third country, which recognises the regulations of the third country as compliant with, and equivalent to, the EU’s own. This recognition allows firms from both the EU and the third country to operate within the territories of both. The UK is seeking an equivalence agreement to allow UK-based financial services firms to continue to serve EU customers from the UK after Brexit.