* UK finance industry prepared to settle for limited EU
* Sees scope for mutual access to UK and EU markets
* Reality dawns that full passporting rights likely to go
(Adds Hodson quotes, second report)
By Andrew MacAskill and Huw Jones
LONDON, Jan 12 Britain's finance industry has
reluctantly given up on efforts to keep full access to the
European Union after Brexit and is pushing instead for a more
limited trade deal that would potentially exclude some financial
Banks, insurers and asset managers have concluded there is
no realistic chance of maintaining full passporting rights after
Brexit that would allow them to sell all their services across
the 28-nation bloc from Britain.
TheCityUK, the country's most powerful financial lobby
group, instead called on Thursday for limited market access for
some finance sectors based on a pact in which Britain and the EU
would accept each other's rules.
Such an "equivalence" arrangement would keep the door open
for cross-border trading of stocks and bonds, and sales of
certain other products.
TheCityUK document is the first attempt to condense the
industry's priorities after months of conflicting lobbying and
comes just two months before Britain plans EU divorce talks.
"I am confident that this represents in broad shape the key
priorities for the industry," TheCityUK Chief Executive Officer
Miles Celic told Reuters.
"There are a multiple number of documents out there of stuff
at significant length. So there was a sense among our membership
to filter down what the key asks were into a single place."
The future of London as Europe's financial centre is one of
the biggest issues in Brexit talks because it is Britain's
largest export sector and biggest source of corporate tax
DOSE OF REALITY
By pushing for an equivalence deal there is a risk that some
financial sectors may be excluded from any final settlement.
There is currently no equivalence regime for commercial banking
or some forms of insurance.
Separately on Thursday, the Financial Services Negotiation
Forum of pro and anti-Brexit financiers also said that Britain
should seek a "bespoke" form of equivalence to maintain market
The current equivalence regime is not a "silver bullet"
solution that can replace passporting in its entirety, it said
in a report with law firm Norton Rose Fulbright.
Daniel Hodson, chairman of the forum's executive committee,
said the financial sector was now coalescing around equivalence
after having had time to consider how it could work.
"There is considerably increased realism now that people
have begun to really focus on the issues and get their mind
round them," Hodson said.
Until now, finance organisations have clashed over who
should be leading efforts to lobby the government and what their
Brexit response should be.
After the June vote, business leaders begged for Britain to
stay inside the single market, for example, by having a
Norway-style deal that would provide full access to Europe's
But EU leaders have repeatedly warned that single market
access is defined by the bloc's four freedoms - free movement of
goods, capital, services and people - and that they cannot be
TheCityUK proposals call for "clear and upfront transitional
arrangements" to bridge the gap between leaving the EU and the
start of a bespoke deal, though they do not specify a timeframe.
($1 = 0.8248 pounds)
(Editing by Jane Merriman/Keith Weir)