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Friday
Jun242016

Brexit: What happens to UK financial regulations?

The job of the UK's top financial regulator includes enforcing requirements to designate compliance officers with defined professional roles and duties.

A lot of the regulations the Financial Conduct Authority enforces are based on EU-wide rules. So what happens now?

For example, the FCA fines companies for failing to take reasonable care to establish and maintain effective systems designed to prevent and detect bribery and corruption risks.

The FCA oversees rules for the UK banking and insurance sector to protect whistleblowers and encourage them to come forward.

And it sanctions compliance officers when they don't show enough independence.

The FCA issued a statement Friday intended to calm the markets and bring stability and certainty.

Bottom line: The financial regulatory regime in the UK, even those big parts based on EU rules, still apply and will be enforced.

Only affirmative action by the UK government can change the rules, the FCA said. Until that happens, it's business as usual.

*     *     *

Here's the FCA's June 24, 2016 statement:

On 23 June, the UK voted to leave the European Union (EU). This has significant implications for the UK.

The FCA is in very close contact with the firms we supervise as well as the Treasury, the Bank of England and other UK authorities, and we are monitoring developments in the financial markets.

Much financial regulation currently applicable in the UK derives from EU legislation. This regulation will remain applicable until any changes are made, which will be a matter for Government and Parliament.

Firms must continue to abide by their obligations under UK law, including those derived from EU law and continue with implementation plans for legislation that is still to come into effect.

Consumers’ rights and protections, including any derived from EU legislation, are unaffected by the result of the referendum and will remain unchanged unless and until the Government changes the applicable legislation.

The longer term impacts of the decision to leave the EU on the overall regulatory framework for the UK will depend, in part, on the relationship that the UK seeks with the EU in the future. We will work closely with the Government as it confirms the arrangements for the UK’s future relationship with the EU.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.

Reader Comments (2)

Don't forget the Financial Reporting Council in the UK (www.frc.org.uk) which regulates the audit and accounting sector and has just implemented the EU Audit Directive. In the past, it has been at the forefront of development of accounting, auditing and governance standards.
June 24, 2016 | Unregistered CommenterRob Wilson
Hey, question. How long do you think things will be "business as usual"? When will the regulations change?
June 27, 2016 | Unregistered CommenterPascal Bergeron
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