“Having to comply with financial regulations we have no say over would be the worst possible scenario for our world-leading insurance sector, so we will look to the government to negotiate a better outcome than this,” said Huw Evans, the director general of the Association of British Insurers. “Whatever the final outcome, the insurance industry is too important to be a rule taker.”

City of London institutions have already scaled back expectations of continued full access to the EU from Britain once any transition period ends, or that a novel, bespoke trade deal can be agreed.

The central bank has been urging overseas insurers to reduce their holdings in Malaysian units to no more than 70 percent as it more strictly enforces ownership limits. The regulator earlier gave these firms until June 30 to cut their stakes, people familiar with the matter said last year

In his final statement, Xiang pleaded guilty and expressed repentance.

“It’s important that we don’t dilute standards beyond the internationally accepted, but tests of appropriateness, proportionality and international equivalence are key,” Stephen Hammond, a member of parliament’s Treasury Select Committee (TSC) told a City & Financial conference

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“Why would the equivalence system, which works well for the U.S. industry, not work for the City?,” Michel Barnier told a financial conference in Sofia, the Bulgarian capital.The so-called equivalence system works on the basis of Brussels granting access to the EU for banks, insurers and asset managers from outside the bloc if the bloc deems their home rules to be similar enough.