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Lords committee launches new inquiry into financial regulation and supervision

The UK House of Lords EU financial affairs sub-committee has begun a new inquiry into the future of financial regulation and supervision following Brexit.26 Jul 2017

The inquiry will examine how financial regulation and supervision should change following Brexit to ensure financial stability, and how regulation could potentially be used to maintain equivalence or some other form of relationship between UK and EU regulatory regimes to preserve market access.

The inquiry will also cover the institutional structures that support the UK's regulations.

The committee will look into whether equivalence is the best way to achieve continued cooperation and at what other forms of alignment could be used, at the differences between the UK, EU and international regimes in financial regulation and where gaps exist, and at any areas where it could be beneficial for the UK to deviate from the current EU framework, it said.

It will also consider how any divergence and shared supervisory concerns can be managed, including mechanisms for dispute resolution.

Written evidence can be submitted until 29 September and public hearings are expected to begin in September.

Financial services regulation expert Michael Ruck of Pinsent Masons, the law firm behind said: "While equivalence or an alternative solution are high on the agenda for financial services regulation going forwards, other issues to be decided include the structure for ongoing supervision of financial services regulation in the UK and how any measures will be enforced. The Financial Conduct Authority (FCA) at its recent annual public meeting recently confirmed that repeal legislation and re-drafting its handbook for a post Brexit world are high on its agenda. The FCA and Prudential Regulation Authority have taken significant steps forwards of late but will continue to need adequate resource to ensure such progress is not lost."