Steven Maijoor, who chairs the European Securities and Markets Authority, the Paris-based EU markets watchdog, said on Tuesday that there were legitimate concerns that financial companies would try to find and exploit loopholes between the UK and the EU after Brexit, in what is known as regulatory arbitrage.
This was one reason why Esma was pushing for sweeping powers to directly supervise firms from countries outside the bloc that could pose a systemic threat to the EU, he said. The EU is tightening up the rules around so-called equivalence, which allows firms from countries outside the bloc to access EU markets in certain areas. The revamp is looking to give Esma additional powers.
“Even if the rules will be close to one another, there is still a risk of regulatory competition,” Mr Maijoor said at a conference in London. “The reality is these markets will continue to be interconnected, and there is a risk of regulatory competition. It’s the reason we have argued for these powers [ . . .] if we have an outcomes-based system, there is a risk of regulatory competition.”
He was responding to comments made by Chris Woolard, who is the executive director of strategy at the UK’s Financial Conduct Authority, who said on the same panel on Tuesday that regulatory arbitrage could be mitigated because there would be no “bonfire of regulations” once the UK left the bloc, now scheduled for October 31. This message has been consistently repeated by the UK authorities.
The FCA and the Bank of England have revived calls recently for “outcomes-based” equivalence between the UK and the rest of the EU to secure access to one another’s financial markets post-Brexit, rather than having to follow detailed EU rules that the UK authorities would have no part in forming. [...]
Full article on Financial Times (subscription required)
© Financial Times
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article