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EU and UK regulators agree no-deal Brexit info sharing

EU and UK financial regulators have agreed processes for sharing financial and market information if there is a no-deal Brexit. The agreements will help fund managers to continue to outsource some services.01 Feb 2019

The EU regulator said this would enable it to carry out its duty to preserve financial stability.

The UK's Financial Conduct Authority (FCA) has signed memorandums of understanding (MoUs) on sharing information on credit rating agencies and trade repositories with the European Securities and Markets Authority (ESMA) and a multi-lateral MoU on wider cooperation and information sharing with financial regulators in the EU and European Economic Area (EEA).

The FCA said that the MoUs would help avoid market disruption, particularly in investment management.

FCA chief executive Andrew Bailey said: "[The agreements] will allow for continued close cooperation in the event the UK leaves the EU without an agreement. They should also minimise the potential for disruption, which we know is particularly important for the investment management sector, credit rating agencies and trade repositories."

Fund managers can employ companies in other countries to undertake portfolio management for them and EU laws say that in these cases there must be cooperation agreements between regulators in those countries.

The agreement on information sharing and supervisory cooperation with the many EU regulators allows fund managers to outsource these tasks between the UK and the EEA, an ESMA statement said.

Financial regulation specialist Elizabeth Budd of Pinsent Masons, the law firm behind, said: “These are long-awaited MoUs. The Multi-lateral MoU covering supervisory co-operation in particular is critical to the investment management industry in the UK. It allows European fund managers to delegate and gives them continued access to the expertise of UK investment managers.”