The headlines have been (almost) universally positive - the EU Commission, the body charged with determining how and when non-EU firms can access EU markets, has announced that "central clearing" (the process by which a "central clearing counterparty" or "CCP" stands in the middle of a transaction and guarantees it) of EU-denominated or traded instruments can continue after 31 December 2020. This is a victory for common sense and for those saying that the UK's and the EU's financial stability would be threatened otherwise. 

The small print, however, is not so heartening: first, this is a time-limited decision; and second, it is the only likely compromise on offer from the EU in the medium term. UK investment firms will not be able to access, provide services into or undertake activities in the EU without having a branch or subsidiary in the EU itself.

This will adversely affect both the EU and the UK. Incumbent and large equities and derivatives markets, such as those operated by Deutsche Boerse, have recognized this and are offering (albeit slightly limited) continued access to their markets by UK firms. Other EU markets have not taken these steps.

1 January 2021 (and after) is going to demonstrate just how robust a suddenly-fragmented European financial services market and newly-exceptionalist EU financial services market can be.