In a speech in London this morning, Financial Conduct
Authority (FCA) chief executive Andrew Bailey set out the
continued aims and ambitions of the regulator as the financial
sector grapples with continued Brexit uncertainty.
While he joined his former colleagues at the Bank of England
in being positive about the progress that has been made by the
financial sector to mitigate circumstances in the event of a
no-deal Brexit, he warned: "There remains a risk of adverse
outcomes for consumers from disruption in Brexit."
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Bailey continued: "we have made considerable progress, but
we do not underestimate the task ahead", adding that the
regulator will continue to work with firms to ensure that their
contingency plans are in order.
He also insisted that the focus of the FCA is a strong
commitment to open financial markets; something which he does
not think needs to be compromised by Brexit.
There are however a number of lingering issues that in one
form or another require further action, either in the UK or the
EU – for instance, the derivatives trading obligation
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Again stressing the need for a set of equivalence agreements
between the UK and the EU, Bailey warned that unless the UK and
the EU find each other’s regulatory regimes
equivalent, EU firms will not be able to meet the
EU’s DTO by using UK trading venues to trade
in-scope derivatives, and vice versa.
This would mean harm to both markets, he added, as EU firms
may lose access to UK liquidity pools, resulting in
The FCA is overall positive about the future of UK
regulation, and keen to assure markets that there will be no
spiral of deregulation once the UK departs.
"Left to our own devices, we will consider doing things
differently," he said in a Q&A following his speech,
insisting that the UK would not end up being a rule-taker as
feared by many in the industry.
Overall, he feels the regulatory direction taken by the UK
and the EU will continue to produce the same outcomes
– even if they go down different roads to get
Read the full speech here.
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