On February 5, 2018, the Chief Executive of the Financial Conduct Authority, Andrew Bailey, gave a speech on Brexit at the Future of the City dinner. Mr. Bailey called for a joint commitment by the political authorities to a defined implementation period before the end of March this year and confirmed that the FCA regards Brexit as a top priority. He discussed the operational issues that may arise as a result of Brexit, for example, contractual continuity for derivatives and insurance contracts, U.K. CCP clearing services and the holding and sharing of data. He also highlighted that mutually agreed and enacted provisions in both the U.K. and the EU were needed to properly address these matters. The FCA is working with the U.K. Government to ensure that the U.K. has a functioning regulatory regime on the date of Brexit and during any transitional period. The U.K. Government has confirmed that it will introduce draft legislation, if needed, to ensure an interim regulatory permissions regime and to ensure contractual continuity.
In addition, Mr. Bailey discussed the advantages to both the EU and the U.K. of adopting a mutual recognition regime post-Brexit which continues the existing open financial markets. He noted that during the EU's negotiations with the U.S. on the Transatlantic Trade and Investment Partnership, the EU proposed the inclusion of financial services in the trade agreement, which was based on mutual recognition and close regulatory cooperation, and suggested that the proposal could be used as a starting point for the EU and U.K. to agree a framework for mutual recognition.
The text of the speech is available at: https://www.fca.org.uk/news/speeches/future-city.
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