FCA’s Andrew Bailey suggested that Britain would favour a “lower burden” approach to financial regulation after leaving the European Union in October.
Commenting on the effects Brexit could have for the UK’s future direction of financial regulation, Monique Melis, Managing Director, Regulatory Consulting at Duff & Phelps, the Global Advisory firm comments:
“The FCA has made it clear that it is not looking to lower the quality of outcomes in regulation post-Brexit but will target regulation in the areas where it is needed most for the UK market. When it comes to financial regulation, the UK has proven to be a consistent leader with a good reputation for implementing regulatory changes, as befits its status as the world’s leading financial centre. This was seen with both Mifid I and II, in which changes were implemented with speed and efficiency.”
“Arguably, the regulatory machinery we are currently seeing in the global financial services market can be attributed to innovation engendered in the UK. We anticipate that the UK will continue to lead the way for regulation in the future.”
“One key difference we may see post-Brexit is a return to principle-based system of regulation. Whilst the UK prefers principles and outcomes, the EU has a penchant for hard-coded detailed rules to maintain certain standards of regulation. The UK adopting a more principles-based approach could mean that we are able to regulate more quickly than the EU post-Brexit.”
“However, what will be important post-Brexit – regardless of geography or approach to regulation, is that the regulator is seen to be acting swiftly, robustly and fairly when issues arise.”
