Andrew Bailey, CEO of the FCA is giving a speech today at Bloomberg on the subject of preparations for Brexit. Here are some extracts from the draft;
“At the heart of the FCA’s approach is our strong commitment to open global financial markets. There is no reason to believe that Brexit should restrict access to financial markets. The UK’s financial markets are – as the IMF has described them – a global public good, and we want to keep it that way.
Our preparation work therefore requires close involvement with our counterparts around the world, and particularly in the European Union. As part of that, we continue to be an active member of ESMA and we work closely with regulatory authorities in the EU27. As I said in April, wherever we end up, our markets will remain closely linked and we will continue to co-operate closely with our EU counterparts after exit in order to meet our objectives.”
Bailey notes that much of the no-deal scenario work has been done;
“As the Bank of England has recently set out, preparations for a No Deal No Transition Scenario have advanced. It is worth noting that the largest part of the overall Brexit preparation work is for this scenario, because it would involve the largest change in short order. As a consequence of the progress made, the Bank has judged that its assessment of the impact of this scenario has become less severe.”
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In case Boris actually pulls a rabbit from the hat, the FCA has a great deal of reciprocal arrangements in place;
“We have concluded new cooperation agreements with the EU markets, insurance and banking authorities which will take effect in a no deal outcome. These MoUs provide a framework for the sharing of confidential information, which will assist us in carrying out our functions; allow UK or EU based firms to delegate or outsource certain activities to firms based in the other jurisdiction; and support future market access and equivalence decisions. We have also agreed changes to 43 non-EU MoUs that we need to amend and expect to have all necessary MoUs signed by exit day.”
If the UK leaves, data will still be shared with EU member states;
“The UK Government has legislated to allow the free flow of personal data from the UK to the EU in a no-deal scenario, but without action by EU authorities EU rules would limit the flow of personal data from the EU to the UK. This could restrict EU households and businesses accessing financial services from, and continuing contracts with, UK financial service providers.
Given the large range and critical nature of activities, the variety of financial services sectors potentially affected and the scale and importance of cross-border flows of financial services between the UK and EU, we believe there are risks if there is disruption to cross-border flows of personal data from exit day.
As regulators, we also share a lot of data with our European counterparts. Since the introduction of MiFID II in January 2018, we are now passing on around 70% of transaction reports to counterparts across the EU. Data sharing provides both the UK and EU countries with a vital foundation to tackle cross-border market abuse, including insider dealing and cross-market manipulation.”
Insurers will continue to meet claims,
“Let me start by emphasising the FCA’s commitment to prioritising consumer protection in financial services, and to be clear that applies to all consumers wherever they are located. As an example, UK insurers should pay claims on existing policies wherever the policyholder happens to be located.
To be clear, I have never met an insurer who disagrees with this statement, and I doubt that policyholders would either. For our part, we are clear that our consumer protection objective applies equally in respect of consumers wherever they are resident.”
Insurance Edge Comment;
Not quite the armageddon scenario being painted by the pro-remain media is it? If we leave, then in essence very little will change in terms of cross-border action on serious fraud, data handling, consumer data protection or the validity of an insurance policy schedule in France or Germany, assuming the T&Cs are written in the UK. A contract is a contract.
Plus ca change, as they say.
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