In the short-term, the UK Government is working to integrate the current body of EU financial services law into domestic UK law. In the medium-to-longer-term, however, the position is less certain. As I said at the outset, we do not yet have a final withdrawal agreement, despite the latest progress announced on 19 March; nor is the future trading relationship known.
As such, a risk of material divergence between the EU and UK regulatory frameworks is one which must occupy some time as part of wider Brexit preparations. Divergence in the future might be problematic for the following reasons.