The terms of the deal signed off at a European Council meeting on Sunday (26 November) put in place a system of ‘equivalence’ for financial services, which allows UK firms to continue to market into the EU as long as they maintain broadly similar regulatory standards.
It will see the UK enter a transition period after 29 March 2019, which will last for two years, whereby current standards will remain in place and allow for the details of the UK’s future relationship with the EU to be further negotiated.
In a statement, Cummings said the agreement is “an important step in delivering a final deal that protects the savings of millions of people around the world and the asset management industry that supports them”.
He added that the agreement to ensure decisions on equivalence are taken before the end of June 2020 “will help UK savers and investors to continue to find opportunities across the EU after Brexit”.
However, Cummings said negotiators must now focus their efforts on ensuring that this market access is “fair, transparent, and reliable”.
He explained: “We must not lose sight of the end goal: a final agreement that protects the interests of savers by allowing the asset management industry to work seamlessly across borders.
“The UK is the leading asset management centre in Europe so it is essential that we continue to have a strong voice in the rules that govern our industry, failure to secure this influence risks weakening our competitiveness and ability to serve savers and investors.”
While the Withdrawal Agreement may have been endorsed by the EU, Prime Minister Theresa May faces the prospect of Parliament voting it down at a crucial vote in the coming weeks.
The deal faces opposition from across the House, with concerns about its limited scope, its potential to leave the UK as a ‘rule-taker’ and the controversial Northern Ireland ‘backstop’ plan.
If the deal is voted down, the UK faces a no-deal Brexit unless alternative legislation – such as a second referendum – is passed by Parliament.
Cummings said: “Although there are still important political hurdles to clear in the coming weeks, and firms will continue to keep their contingency plans under review, the agreement today takes us a step closer to a new relationship between the UK and EU.”