Equivalence
Regulatory Equivalence
Definition
A determination by one jurisdiction that another jurisdiction's regulatory and supervisory framework achieves outcomes comparable to its own, enabling cross-border market access. Equivalence decisions are typically unilateral, time-limited, and can be withdrawn, making them a less stable basis for market access than passporting.
Regulatory Context
Post-Brexit, equivalence has become a critical issue for UK-EU financial services relations. The EU has granted limited equivalence to the UK (notably for central clearing). Each regulatory framework has its own equivalence provisions with different assessment criteria.