FCA identifies 7 outstanding issues that need attention to ensure orderly Brexit
The FCA head has identified seven outstanding issues ahead of the UK’s European divorce during a speech at Bloomberg headquarters.
Financial Conduct Authority (FCA) chief Andrew Bailey has outlined seven outstanding issues either in the UK or EU that need to be addressed to ensure an orderly Brexit.
During his speech at the Bloomberg headquarters, Mr Bailey explained that the remaining issues include a possible overlap in share trading rules which could damage market liquidity.
Mr Bailey also raised concern that the EU’s derivatives trading obligation could mean that EU firms using UK trading venues to trade in-scope derivatives do not comply.
Also drawing attention are the EU’s data exchange rules which, the FCA explained, limit the flow of personal data from the EU to the UK, restricting EU households and businesses accessing financial services from UK financial service providers.
Furthermore, Mr Bailey cautioned that since the progress on repapering has been gradual, its absence may have an impact on business in the EU post-exit.
“Several EU Member States have legislated to allow UK firms to continue temporarily to provide certain services in their jurisdiction following a no-deal Brexit. But these access provisions are not EU-wide and they vary in respect of which activities they cover and what their durations are. There is therefore uncertainly around how some of these provisions will be applied,” Mr Bailey said.
Last on Mr Bailey’s issues list is retail financial services preparation. He explained that while a majority of UK firms have confirmed that they plan to maintain existing products and services to their customers in the EU, there remains a risk that lack of legal certainty in some jurisdictions will create adverse outcomes for consumers.
“Our approach to these issues has been a mix of engagement with other authorities and seeking to ensure firms are prepared. We have been clear that we expect firms to do what they can to act consistently with local legal and regulatory requirements and expectations while being driven by the right consumer outcomes,” Mr Bailey said.
He concluded that while the FCA does not take a view on the substance of Brexit, it does believe that “however and whenever it happens, it should not compromise protection for all consumers wherever they are domiciled”.
“We cannot relax; progress is welcome, but there are issues still to be resolved and uncertainly to be dealt with,” Mr Bailey said.