FCA to limit rule changes in Brexit run-up

FCA to limit rule changes in Brexit run-up

The Financial Conduct Authority has agreed to limit the number of rule changes it will make in the run-up to Brexit because of the risks this would involve.

Minutes for the most recent FCA board meeting in January showed the regulator's management discussed how it would be affected by the process of Britain leaving the European Union.

The board noted that in addition to advising the Treasury on existing EU legislation and resulting amendments to domestic legislation, there would be a complete review of handbook.

As a result of the volume of changes to the handbook which would be needed between September 2018 and 29 March 2019 - the date Britain would leave the European Union if no transitional period was agreed - the FCA agreed to limit other "business as usual" changes.

The board minutes said: "The risks to the organisation in connection with Brexit, including the Treasury timescales and potential for an increased workload during the transition period were noted, together with planned mitigating actions.

"It was also acknowledged that the FCA would take on some new responsibilities as a result of the transfer of functions from EU bodies."

The FCA's board also noted the proposed consultation process for changes to the handbook as a result of Brexit but said elements of this were outside the regulator's control.

Meanwhile the FCA's board also agreed to take a closer look at the cash savings market, and publish a discussion paper on the issue, following the regulator's previous work on market.

A market study by the City watchdog in 2015 found around £160bn of the funds held in easy access savings accounts earned an interest rate equal to or less than the Bank of England base rate of 0.5 per cent in 2013.

Consumers polled by the study found it difficult to know what rate they were on, or were put off switching by the expected inconvenience.

In the board minutes, the FCA said: "The board was reminded that the 2015 cash savings market study identified some harms for which a number of remedies aimed at improving how customers can open, manage and switch their accounts, had been implemented.

"These harms were not fully addressed by the remedies implemented, additional remedies are therefore being proposed to address the outstanding harm. The board noted that the proposals follow the testing of remedies to improve switching which did not succeed."

After the publication of the discussion paper, the FCA said it would then consult on possible proposals.