The European Securities and Markets Association (ESMA) has released its opinion on supervisory convergence in the context of the UK withdrawing from the EU.  This Opinion contains 9 high-level principles which are expected to contribute to supervisory convergence in the Brexit context:

1. No automatic recognition of existing authorisations
2. Authorisations granted by EU27 national competent authorities (NCAs) should be rigorous and efficient
3. NCAs should be able to verify the objective reasons for relocation
4. Special attention should be granted to avoid letter-box entities in the EU27
5. Outsourcing and delegation to third countries is only possible under strict conditions
6. NCAs should ensure that substance requirements are met
7. NCAs should ensure sound governance of EU entities
8. NCAs must be in a position to effectively supervise and enforce Union law
9. Coordination to ensure effective monitoring by ESMA

ESMA intends to develop further guidance in particular for asset managers and investment firms; this is meant to provide sector specific details on the aspects described in the general opinion. This should be discussed and adopted in early July.   

Please contact Jennifer Wood if you have any questions regarding this opinion.