United Kingdom (and EU regulation)

FCA speech – Regulating the UK as a global financial centre

By Simon Lovegrove (UK) on April 14, 2021 Posted in Regulation and compliance, United Kingdom

On 13 April 2021, the FCA published a speech by Nausicaa Delfas (Executive Director of International) entitled Regulating the UK as a global financial centre.

Key points in the speech include:

As a result of the UK leaving the EU, the FCA has a newfound position allowing it to have a new, more nimble approach to domestic policymaking. It can focus on using this new flexibility for the global markets it hosts in the UK, and to better meet consumers’ needs. This, in turn, will make the UK an even more attractive place for global financial services.
In the wholesale market the FCA is already taking steps to better tailor its rules and practices. For example last year the FCA announced that it would not automatically apply the Double Volume Cap (DVC) to UK equities. It is now extending this to trading in all equities. In addition, the FCA is working with HM Treasury to design the mechanics of the forthcoming Long-Term Assets Funds regime.
The FCA is looking to consult by mid-year, on proposals for disclosures by asset managers, life insurers and FCA-regulated pension providers that are aligned with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.
All firms operating in the UK can expect to be held to the same high standards. The FCA’s Policy Statement on its approach to international firms, which was published in February this year, sets out how the FCA will authorise and supervise firms operating in the UK in future. This is to be read alongside the PRA’s requirements for dual regulated firms.
The FCA has been working closely with its US counterparts to ensure UK firms’ access to US markets continues and is strengthened, where possible. The FCA was pleased to see the Securities and Exchange Commission (SEC) recently publish a notice and draft order of the UK’s application for substituted compliance for securities-based swaps dealers. If granted, the UK will be one of the first jurisdictions to be granted this recognition by the SEC.
The FCA’s co-operation with the US also includes the ongoing efforts between the FCA and Commodity Futures Trading Commission (CFTC) to ensure the current time-limited relief provided to UK trading venues is put on a permanent footing with a CFTC-issued final order. If granted, this recognition will provide UK firms with the certainty they need to conduct their business in the US with confidence.