The “random” discovery by an FCA policy adviser of a UK-sponsored European directive shows how isolated UK regulators are, Michael Mainelli has said.
The academic and co-founder of the think-tank Z/Yen said: “This provides an example of how isolated UK regulators are.
“They sit in their regulatory towers because they’re unable to ‘talk to markets’.”
Mr Mainelli cited the City Office in Brussels, which liaises between the City of London and both the EU institutions and member states to strengthen dialogue.
He said it has been very effective over almost a 10-year period and suggested the FCA uses it.
His comments followed a revelation by Martin Wheatley, chief executive of the FCA, telling attendees at its annual review meeting that any progress on a limit on liability for UK financial advisers could be stalled because of a European directive that was being sponsored by the department for business, innovation and skills.
Speaking after the event, Zitah McMillan, FCA director of communications and international, said: “Strangely enough, one of our policy people was randomly looking, just double-checking, and found the link.
“They thought ‘why do we not know about this?’ so we went to BIS, who confirmed. It is a bit of a frustration for us.”
The directive discovered by accident was the European Alternative Dispute Resolution Directive, which gives consumers more protection.
Ms McMillan added: “There are so many directives directed at us that we can’t send people off randomly checking other government departments’ homework for them.”
A spokesman for the FCA confirmed it does not have anyone based in Brussels or Strasbourg that engaged on EU policy and pan-European issues such as regulation.
James Walsh, EU and international lead policy adviser at National Association of Pension Funds, said EU engagement was “a vital part” of the NAPF’s work and, wherever possible, it worked with colleagues from other member states, particularly through its EU umbrella group, Pensions-Europe.
Since 1971, the Confederation of British Industry has had a Brussels office dedicated to lobbying on behalf of British business in Europe and, while the Bank of England does not have a representative in Europe, it has people who represent the UK in international meetings.
The Bank also has a direct relationship with the ECB.
The Trade Union Congress has an entire department, the European Union and international relations department, that works closely with the EU.
ADVISER VIEW
Clare Griffiths, senior policy adviser at the Association of Professional Financial Advisers, said: “While Apfa does not have an in-house resource dedicated to European issues we monitor developments closely and respond to proposals through our engagement with the FCA and our membership of European Federation of Insurance Intermediaries.”
ADVISER VIEW
The FSA, the FCA’s predecessor, actively engaged with the EU. In a statement still visible on the old FSA website, it described itself as dedicating “a significant share of its resources to working with European institutions and our fellow EU regulators”.
