UK presses ahead with using EU securities reform

© Reuters. A man shelters under an umbrella as he strolls past the London Stock market

LONDON (Reuters) – Britain’s financial watchdog published on Friday a consultation paper on carrying out a reform of European Union securities markets, signaling to banks that last month’s vote by Britons to leave the EU needs to not derail preparations for the new rules. The bloc’s MiFID II reform will bring in sweeping modifications to securities markets by tightening controls of commodities, injecting more openness into trading, and playing regulatory catch up with ultra-fast share orders. The guidelines enter force in January 2018, only a year prior to some UK federal government ministers desire Britain to have completed settlements to leave the EU. Financial Conduct Authority Chief Executive Andrew Bailey said MiFID II reflected themes of UK conduct regulation and carried out global commitments that Britain had backed – meaning such rules would remain in location after leaving the EU. “As we said in our statement following the EU referendum, firms must continue to follow their responsibilities under UK law, consisting of those originated from EU law and continue with execution prepare for legislation that is still to come into result,” Bailey stated in a statement. He has currently cautioned there will not be a “bonfire of regulations” after leaving the EU. The new European securities law will likewise present the capability for nations outside the bloc to offer their services to European clients if they can show that their own rules are “equivalent” or as strict as those in the EU. Attorneys have said this would suggest Britain can leave the EU’s single market as its monetary services sector might rely on the equivalence program to continue operating throughout the bloc. Critics state the equivalence system is untried, susceptible to political interference, and hard to keep if the bloc makes changes to its guidelines which Britain might not concur with.
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