Equivalence

Regulatory Equivalence is a formal determination made by a jurisdiction, such as the European Union or the United States, that the regulatory, supervisory, and enforcement regime of a third-country is comparable to its own, achieving the same outcomes and level of safety and soundness. This determination is crucial in financial services, particularly in areas like Anti-Money Laundering (AML), Know Your Customer (KYC), and sanctions compliance, as it allows firms operating in the third-country to be treated as compliant with the domestic rules, thereby reducing regulatory overlap and facilitating cross-border operations.