The British pound closed down 0.03% to $1.281 on Monday after the European Union's Council of Ministers endorsed the U.K.'s withdrawal agreement at a special meeting Sunday.
The withdrawal agreement unveiled over the weekend outlined further details of the transition, during which the terms of the future relationship between the United Kingdom and the EU will be concluded.
The text of the withdrawal agreement, which becomes effective March 30, said EU law will be applicable to and in the U.K. during the transition period, scheduled to end by Dec. 31, 2020. There is a need for the U.K. to be able to "prepare and establish new international arrangements of its own," including in areas where the EU has had "exclusive competence," the agreement states.
However, the agreement stated the "there is a need for both the United Kingdom and the union to take all necessary steps to begin as soon as possible after March 29, 2019, the formal negotiations of one or several agreements governing their future relationship with a view to ensuring that, to the extent possible, those agreements apply from the end of the transition period."
The U.K. can extend the transition period at any time before July 1, 2020, according to the document.
"We are reassured by the commitment expressed today that decisions on equivalence will be taken before the end of June 2020 and in a co-operative manner, which will help U.K. savers and investors to continue to find opportunities across the EU after Brexit. The focus must now be on ensuring that this access is fair, transparent and reliable," said Chris Cummings, CEO of the U.K. Investment Association, commenting on the withdrawal agreement.
"Crucially, we must not lose sight of the end goal: a final agreement that protects the interests of savers by allowing the asset management industry to work seamlessly across borders," Mr. Cummings added. "The U.K. is the leading asset management center in Europe so it is essential that we continue to have a strong voice in the rules that govern our industry; failure to secure this influence risks weakening our competitiveness and ability to serve savers and investors."
