(Adds more detail, Barnier comments on financial services)
LONDON, Feb 27 (Reuters) - Britain said on Thursday it wants
"legally binding" obligations on access to the European Union
financial market coupled with arrangements for maintaining trust
as rules evolve.
London, Europe's biggest financial centre, faces being
locked out of its biggest export market for services like
banking, insurance and asset management if there is no access to
the EU from next January.
A trade deal with the bloc should provide a "predictable,
transparent and business-friendly environment" for cross-border
financial services activities, Britain said in its mandate for
trade talks with Brussels.
"The agreement should include legally binding obligations on
market access and fair competition," the document said.
The EU has only spoken of "voluntary" cooperation in
financial regulation.
The financial sector has said that the EU system of market
access, known as equivalence, is opaque, and access can be
withdrawn in 30 days, making it unreliable.
Britain says it wants arrangements to allow regulators on
both sides to cooperate and build "enduring" that can deal with
rules as they "evolve".
Britain fears that the EU would seize on any divergence from
EU financial rules as an excuse for what incoming Bank of
England Governor Andrew Bailey called a "punch up" with UK
regulators and a scrapping of access.
Britain and the EU have agreed to assess each other for
financial market access by the end of June.
The mandate says that Britain has left the bloc with the
same rules as in the EU, thereby providing a "strong basis" for
concluding the assessments on time.
A senior aide of Michel Barnier, the EU's chief trade
negotiator, said last week that completing assessments in June
would not mean an actual decision on access.
A decision on EU financial market access would consider
progress on a wider UK-EU free trade agreement in obtaining
access to UK sectors like fish.
Barnier said on Wednesday that UK financial firms that want
certainty in their relations with EU customers can set up
subsidiaries in the bloc, which over 300 have done.
For the others there is equivalence, Barnier said.
"But these equivalences will never be global nor permanent.
Nor will they be subject to joint management with the UK. They
are, and will remain, unilateral decisions," he said.
(Reporting by Huw Jones; editing by William James/Guy
Faulconbridge)