Wheatley: Suite of global reforms will ‘strengthen’ markets

Regulatory changes and initiatives on an international level including sweeping reforms being implemented across the EU and for the global banking sector will “substantially” strengthen markets and protect UK investors, the Financial Conduct Authority chief executive has said.

In a speech at the Markets Conference, Martin Wheatley flagged up that in response to the global failure new initiatives were put in place which, “once brought together and finalised” will strengthen markets.

Mr Wheatley said regulatory standards have been tightened “from a policy perspective” as a number of European and international policy initiatives have come to fruition.

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He cited the first version of the EU’s Markets in Financial Instruments Directive, the wide-ranging directive covering retail investment activities, which has “radically changed” market infrastructure. He added that Basel III has strengthened institutions and that the European Market Infrastructure Regulation continues to develop technical standards.

Mr Wheatley added that a number of other pieces of legislation are still in the pipeline, several of them in the final stages of negotiation, highlighting in addition that “the perimeter of regulation” has expanded with the new Market Abuse Regulation.

He claimed this will bring more products within regulatory scope, while the second iteration of Mifid will define new types of trading venues.

Mr Wheatley said: “Once brought together and finalised, these changes will substantially strengthen our markets. The new regulatory architecture will give us better oversight of activity across industries and asset classes.

“Market infrastructure will be stronger with more consistent treatment across platforms, and risk management will be improved in OTC transactions. Firms will be more robust, with increased capital, higher levels of liquidity and better collateralisation.

“And investors will have a clearer sense of what they are investing in, strengthening their roles as drivers of growth and competition.”