FCA chief reflects on Brexit agenda 

Bailey has today (July 6) reflected on his year anniversary at the regulator and the work that is on-going in regards to Brexit.

He said: “I can’t deny that Brexit is a lot of work, and it did not feature in our business planning as a reality until a year or so ago, so a lot of sleeves have had to be rolled up.”

Commentary around Brexit has suggested it will inevitably lead to restrictions on trade, on the location of activity in financial services and on open markets.

Speaking at a Thomson Reuters discussions forum, Bailey explained how the FCA is ready to provide whatever technical advice is needed to support the government in the Brexit negotiations ahead.

The watchdog also said it’s working with authorised firms to understand their plans for the future of their cross-border operations into the EU, and from the EU to the UK.

The FCA has the most work to do in working with the government on the repeal legislation, which involves a line-by-line analysis of each piece of EU legislation and rulemaking.

The repeal legislation will repeal the 1972 European Communities Act, which took Britain into the EU and meant that European law took precedence over laws passed in the British parliament. It will also end the jurisdiction of the European Court of Justice.

Bailey said although the repeal legislation changes the legal basis for important parts of the regulator’s framework, it does not change their objectives.

Following the result of Brexit last year, the FCA decided that as long as the UK remains a member of the EU, it would engage constructively in its work with, and as part of, the European institutions and will continue to implement EU legislation during this period.

Bailey said: “We also need to preserve close regulatory and supervisory links with the EU. Looking ahead, strong co-ordination is a sensible approach to take in order to demonstrate the strength of the system.”

He said the key elements of this co-ordination would be:

• Comparability of rules, but not exact mirroring;
• Supervisory co-ordination;
• Exchange of information;
• A mechanism to deal with differences.