Britain to use EU freedom to regulate markets flexibly

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Britain to use EU freedom to regulate markets flexibly

London- Britain will use its freedom from the European Union rules to regulate markets flexibly and make the City of London even more attractive for global investors, the Financial Conduct Authority said on Tuesday.

Since full separation on Dec 31 from the bloc, the financial sector has been largely cut off from the bloc with no sign of increased direct access any time soon as the EU builds up capital market autonomy in stock and derivative trading.

Nausicaa Delfas, who runs up the international division of FCA, said Britain's financial market was in a new phase but would remain open to the world and built on robust standards.

Our domestic position allows the FCA to have a new, more nimble approach to domestic policymaking. We can focus on using this new flexibility for the global markets that we have in UK, Delfas told a City Financial Conference.

The departure from the EU presents us with opportunities to do things differently, and that is an opportunity that we will grasp.

The FCA has begun easing out the curbs inherited by the EU on anonymous or dark-based trading in blocks of shares.

Two government-backed reviews have recommended easing the listing rules to attract more foreign primary and secondary listings to compete better with New York, Singapore and the EU.

The Finance Ministry will set out its own proposals for capital market reform in the coming weeks and Clare Cole, the FCA executive director for market oversight, told the conference that the watchdog is keen to undertake a more fundamental review of the markets it operates.

Easing listing rules is controversial and the FCA will consult broadly to ensure the right level of protections, Cole said.

We have to think about an appropriate regime for overseas issuers who are listed elsewhere and how we can help with the disclosure requirements, Cole said. Over time, we see a package of reforms.

Jonathan Hill, the UK lawmaker who chaired the listings review, said after years of post-Brexit paralysis in the city, there was now a rare moment of opportunity to reform.

The challenge for us all is how do I keep the momentum going, Hill said.

EU firms with operations have applied for a UK licence, but Delfas warned that permission would only be granted if there are good relations with their home regulators.

Britain and the EU have agreed on a non-binding framework for regulatory cooperation, but it makes provision only for new, non-binding talks twice a year.

Many firms in London have set up hubs in the EU to avoid disruption from the lack of direct City access to the bloc, creating tension between regulators over sufficient staffing at the new EU and existing UK operations.

Delfas said the FCA continues to expect companies to discuss any transfer of functions and staff from the UK that have not been agreed previously.

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