UK must retain financial regulation role after Brexit, says advisory group

Regulators fear pressures of staying competitive could lead to relaxing of rules

                                

The UK must retain a central role in financial regulation after Brexit, a finance industry group has said.

The comments from the practitioner-led, London-based, International Regulatory Strategy Group (IRSG) come as the Brexit withdrawal bill nears winning final apporval.

The group said the UK’s regulators, primarily the Financial Conduct Authority (FCA) and the Bank of England, must ensure that any new rules do not put the UK at a competitive disadvantage.

“Brexit does change the structure around regulation,” said Mark Hoban, chair of the IRSG and a former UK financial services minister.

Once the UK leaves the EU it will be free to write its own regulations rather than following the EU's line. Banks, trading platforms and insurers want to retain access to the EU single market but for this, regulatory regimes need to be aligned.

However, regulators fear that maintaining such alignment could increase pressure on the UK to ease its rules, reports Reuters.

The EU (Withdrawal Agreement) Bill has finally passed all its Parliamentary stages and is due to receive Royal Assent in the next day or so.

The issue is due to be formally approved by the EU Parliament on Wednesday, in time for the UK to leave the EU at 11pm GMT (midnight CET) on Friday next week. Then a transition period will last until the end of the year while future trading relations are agreed.

The FCA has warned UK financial firms to prepare for there being no such trade deal. Nausicaa Delfas, head of international at the FCA, said: “Firms still need to ensure they are prepared for a range of scenarios that may happen at the end of 2020.”

FURTHER READING: British financial services sector pays record tax bill

FURTHER READING: EU braces for an incredible shrinking feeling post-Brexit

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