(Adds more detail)
LONDON, Jan 31 (Reuters) - The European Union's markets
watchdog said it will check how Britain applies the bloc's
financial rules during the transition period that follows Brexit
on Friday.
Britain leaves the bloc at 2300 GMT, with a
business-as-usual transition period until the end of December
when all EU rules still apply.
"In the coming 11 months, ESMA will continue monitoring the
application of EU law to/in the UK and will closely monitor
developments in preparation for the end of the transition
period," the European Securities and Markets Authority (ESMA)
said in a statement on Friday.
ESMA will advise the European Commission in its assessments
by June 30 on whether to grant investment firms and trading
platforms in London direct access to EU investors after December
under an EU system known as equivalence.
Brussels would have to deem that market rules in Britain are
aligned enough with regulation in the bloc for access to be
granted, and ESMA will be checking for any signs of divergence
in rules.
British Prime Minister Boris Johnson has said that Britain
will not be a "rule taker" after Brexit, meaning it will not
continue to copy the bloc's rules but will write its own.
ESMA said that after Friday Britain will no longer take part
in making policy or taking decisions at the Paris-based
watchdog.
The EU has yet to finalise new rules that will directly
affect major foreign derivatives clearing houses serving EU
investors, in particular the London Stock Exchange's LCH unit.
(Reporting by Huw Jones; editing by Jason Neely and Andrew
Heavens)