FCA chief executive says restrictions on trade are not 'inevitable' after Brexit, but makes a plea to keep markets open

Lucy White
Andrew Bailey FCA Brexit
Bailey said “strong co-ordination of regulatory institutions across the UK and the EU” would be needed (Source: Getty)

Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), has made a plea to preserve open markets after Brexit.

Speaking at a Thomson Reuters event, he said that restrictions on trade were not “inevitable” and that firms need not move from the UK.

But he added that “strong co-ordination of regulatory institutions across the UK and the EU” would be needed after the UK departed the bloc in order to preserve open markets and free trade in financial services, which he said was ultimately “in the public interest”.

“There is ample evidence that open markets in financial services and free trade can exist safely without common detailed rules and shared regulatory institutions,” Bailey said.

“Consistent outcomes of regulation are what matters.”

Financial services firms must be free to locate where they see fit, he added, without authorities "dictating" the location of firms.

Read more: Britain and the EU must work together to unite capital markets – or both will lose out, says study

Bailey announced that the FCA was working with the government in three ways towards a satisfactory Brexit conclusion.

The authority would provide any technical advice, is working with firms to understand their future for cross-border operations and is assisting the government with its repeal legislation, he said.

The legislation is the biggest task, according to Bailey, as it takes “line-by-line analysis”.

But he said that post-Brexit Britain need not have any cutback in free trade or open markets for financial services, no less co-operation in regulatory standards, and would not have to resort to protectionist policies to keep firms on its patch.

While Brexit negotiations are still being thrashed out, Bailey said the FCA would continue to engage with the European Securities and Markets Authority (ESMA), and would continue to implement EU legislation.

In the future, he added, the watchdog would not withdraw from international engagement.

Simon Morris, of law firm CMS, said Bailey was making "a clarion call for the softest of soft Brexits".

"This sits uneasily with current political rhetoric, and also the EU stance that post-Brexit Britian cannot enjoy EU-equivalent rights," he said.

But he added that the City would "welcome the FCA articulating what it so badly needs".

Read more: Fines levied by the Financial Conduct Authority fell steeply last year

Related articles