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The Analysis Editor’s Letter


Brexit: confusion reigns, but the regulator is ready


Stephen Kiely Editor, CCRMagazine stephen@ccrmagazine.co.uk


As I sit down to write this letter, political machinations around the future of the country and a potential election are well under way and, I will guess, they will not cleared up by the time you read this – regardless of how long it takes for your copy pass around the office! But, amidst all the confusion, it is good to


seek reassurance and in this light, Nausicaa Delfas, executive director of international at the Financial Conduct Authority, last month spoke at the UK Financial Services Industry Beyond Brexit Summit. She insisted: “We have undertaken extensive


preparations to be ready for a no-deal exit, and have provided extensive guidance for firms. The result of the progress, and preparedness of both regulators and industry, is that the Financial Policy Committee has concluded that the UK financial system has prepared for a disorderly Brexit. Major UK banks and insurers are strong enough, and the biggest risks of disruption to UK users of financial services have been addressed. This does not mean a no-deal exit will not be difficult or disruptive, but we are ready to ensure as smooth a transition as possible.” And, on the continent, a similar story


l Failing to recognise clearing houses would impose significant costs on EU firms as well as potentially straining market capacity, as contracts would have to move. l Limiting the flows of personal data between the EU and the UK, or restricting servicing of contracts cross-border, risks consumers being unable to access the financial-services products they rely on for their everyday lives. She concluded: “So, these risks and other


factors mean that firms need to continue their preparations. “Many firms have made good progress


but we want to ensure that the whole population, including smaller firms, are appropriately prepared. “Therefore, alongside our own regular


was also true: “Our European counterparts have also taken action to mitigate disruption. The European Commission has taken steps to deal with financial stability, but has said it will not take steps to deal with market disruption. EU Member States and regulators have stepped in to smooth the transition – through agreeing MOUs and through national laws. “Overall, whilst we strongly welcome these steps, the solutions on


the European side represent a patchwork. For example, national regimes are partial and differ across member states in terms of scope and duration.” That said, there were still areas where there had not been action


and these issues have consequences for the financial wellbeing of many people in the UK and across the EU, for example:


November 2019


Once we have exited, we will continue to work with firms to make sure their contingency plans are executed effectively – and we call on our European counterparts to undertake the necessary joint activity to deal with issues that arise post exit and act pragmatically where we can


supervisory engagement with firms, we have since the summer stepped up our communications to improve awareness. “We have provided extensive information


on our website and communicated through a range of channels. “Once we have exited, we will continue


to work with firms to make sure their contingency plans are executed effectively – and we call on our European counterparts to undertake the necessary joint activity to deal with issues that arise post exit and act pragmatically where we can. “So that is where we are right now, in


preparing for our exit from the EU. There is no room for complacency and we will


continue to be vigilant in the days and weeks ahead. “At the same time, we are looking to the future: to our future


relationship with Europe; to our future relationships with financial services markets across the world; and to ensuring our regulation is fit for purpose.” So the call has been made: prepare now, but do so against a


backdrop of reassurance that the surrounding regulatory framework is robust. Enjoy the magazine!


www.CCRMagazine.com 3


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