The European Affairs Committee has opened a new inquiry into the impact of Brexit on the UK financial services market.

The Committee, which considers matters relating to the UK’s relationship with the EU and the EEA, will be looking at the impact of the absence of a framework for UK-EU regulatory cooperation.

Currently, there is a Trade and Cooperation Agreement (TCA) in place - which the Committee says unlike other sectors contains only limited provision on the trade in financial services between the UK and the EU - as well as a 'Joint Declaration on Financial Services Regulatory Cooperation', in which the two parties agreed to a Memorandum of Understanding to create "structured regulatory cooperation" on financial services.

While technical negotiations for the Memorandum of Understanding ended in March last year, it still hasn't been formally signed or enforced.

The inquiry will also explore the future of cross-borer UK-EU financial services trade in the absence of equivalence and the impact of regulatory divergence and agreements with third countries on UK-EU services trade.

The EU has granted the UK only two time-limited equivalence decisions for financial services since the signing of the TCA, one of which has expired. In contrast, the UK has granted equivalence to EEA member states in 28 of the 32 areas identified for the equivalence process.

The Committee said that it expects to report on its findings by

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