Regulator shuts down 'race to the bottom' on rules

Regulator shuts down 'race to the bottom' on rules

The looming exit of the UK from the EU will not lead to "race to the bottom" on regulation, the Financial Conduct Authority's head of investment management supervision has said.

Nick Miller said the challenge for regulators and government was to create an environment where financial services firms wanted to remain in London after Brexit, but he said there would not be a "bonfire of regulation".

He added that the FCA is committed to "open markets".

Mr Miller said the FCA welcomed the draft transitional agreement and urged firms to plan on the basis of the transitional agreement announced by the UK and EU governments at the start of the month.

Speaking at the Investment Association (IA) conference in London Mr Miller said the firms regulated by the FCA will grant temporary permissions for firms already regulated to operate within the EU, as long as firms apply for these permissions.   

Analysts at the Economist Intelligence Unit expected the UK to remain a major financial services centre after Brexit because considerations such as timezone and the fact English is the international language of business trumped regulatory changes.

Kay Swinburne, Conservative Member of the European Parliament for Wales, told the conference she detected a change of mood in Europe, with the view a deal needed to be reached on financial services after Brexit.    

Julian Jessop, chief economist at the Institute of Economic Affairs, said financial services in the UK was "Brexit proof to a very large extent" because of factors such as language.