Anyone who hoped voting for Brexit would lead to the reams of red tape generated by Brussels disappearing overnight must be very disappointed.
Aside from the fact there is 43-years worth of red tape to pick through and unravel, there is the reality if we want to do business with Europe or clients on the continent, we must still play by Brussels’ rules.
Britain’s decision to exit the European Union is unlikely to change the need for financial advisers to meet Mifid II requirements and the demands of future rules generated by Brussels, according to regulation experts.
Mark Spiers, head of wealth management and banks at regulatory consultants Bovill, said Mifid II, which is due to come into effect in January 2018, is very much the brainchild of the Financial Conduct Authority.
He said: “Our current position is Mifid II will not materially change and if we go for full Brexit we will want to acquire third country status.
“That means you can get access to the European market and the European consumer but you have to follow their rules.”
Simon Gleeson, a partner at City law firm Clifford Chance, said the need to retain EU rules and to continue to introduce future regulations created in Brussels in order to gain access to the European market was raised during the referendum campaign.
He said: “The damage you might do to the City by not having third country status is greater than the benefits you thought you were going to gain by not implementing whatever it was in the first place.”
But what the Brexit vote has delivered is no more excuses for our nation’s politicians or regulators.
Yesterday (30 June), the Financial Conduct Authority responded to criticism over increasing regulatory fees for mortgage brokers by blaming the continued cost of implementing the Mortgage Credit Directive.
Changes to charges were consulted on back in April, with most advisers seeing a 1.6 per cent fall in costs, although mortgage brokers were landed with an increased funding requirement of 8.7 per cent, meaning a net increase of 7.1 per cent.
This meant the total FCA budget bill for lenders and brokers now stands at £36.8m, with the Association of Mortgage Intermediaries calling for a proper explanation of why the cost is so great.
The regulator pointed the finger of blame for the costs at the Mortgage Credit Directive, which was implemented on 21 March and aimed to create a harmonised mortgage market across the European Union and significantly changed the regulation of second charge mortgages.
Last year, the Intermediary Mortgage Lenders Association revealed the industry remained sceptical about changes under the Mortgage Credit Directive with most brokers believing the introduction of the new rules would not benefit the UK mortgage market.