The proposal to merge the UKLA was put forward as part of the government’s consultation on changes to financial services regulation published at the end of July. Opposition to the proposal has grown over the last month with the London Stock Exchange (LSE) first to break cover in calling for the UKLA to be part of the Consumer Protection and Markets Authority (CPMA) instead.
City bosses are concerned that if the UKLA is merged into the FRC under the guise of a new Companies Regulator as proposed, the City will not be able to influence key negotiations over future financial regulations likely to come from the new European Securities and Markets Authority. Of equal concern is that the government would be replacing one tri-partite authority with another and that primary and secondary investment markets would suffer.
A raft of organisations, from the British Banker’s Association, the Investment Management Association, the Association of British Insurers, the Corporation of London, the Association of Financial Markets in Europe, Royal Bank of Scotland and Plus Markets Group, have followed the LSE’s lead urging the government to reconsider and merge the UKLA with the CMPA. Their responses to the consultation, which closes on Monday, were published by the Treasury Select Committee on its website yesterday.
Even the Financial Services Authority has criticised the plan saying: “This division of responsibilities within the UK would create a highly fragmented representation in Europe.” It adds: “No other major EU countries separate primary and secondary markets regulation because coherence between the two is essential.”