RegulationJun 24 2016

FCA reminds firms EU rules remain in force

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FCA reminds firms EU rules remain in force

The Financial Conduct Authority has stepped in to the uncertainty prompted by Britain’s vote to leave the European Union by reminding firms the result has not led to any regulatory changes.

The referendum result will bring about years’ of negotiations over Britain’s place in Europe and the prospect of a slow unwinding of EU legislation.

But in a statement the FCA said: “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 FCA added that longer term impacts of the decision to leave the EU on the overall regulatory framework for the UK will depend on the relationship that the UK seeks with the EU in the future.

The City watchdog added: “We will work closely with the Government as it confirms the arrangements for the UK’s future relationship with the EU.”

It added that it is in “very close contact” with the firms we supervise as well as HM Treasury, the Bank of England and other UK authorities, and it is monitoring developments in the financial markets.

A spokesman for the FCA said the details of what it has been telling firms is confidential.

Adviser view

Gary Nettleingham, managing director of Essex-based Catalpa Financial Planning, said: “Clearly the result was unexpected by the markets so we having a bit of a knee-jerk reaction which I would imaging will continue for days to come.

“There is obviously a process behind this which will take years to resolve. Financial services is obviously a major component of this and there is a lot of unravel.

“I would have thought it would be in the interests of the UK to provide financial services in the EU as much as possible.”