Senior FCA official underlines common ground between UK and EU post-Brexit
FCA head of international underlines shared focus on outcomes, not identical rules
A senior UK regulatory official has pledged to keep the UK at the forefront of international financial regulation and underlined its common priorities with the EU post-Brexit.
Speaking at a seminar held in London recently by Bryan Cave Leighton Paisner (BCLP), Nausicaa Delfas, the head of international at the Financial Conduct Authority (FCA), said the UK had been at the forefront of establishing international regulatory standards and would “continue to engage with the future EU agenda”.
“This is because we share common regulatory and supervisory priorities, challenges and concerns,” she told the seminar.
The event was held to mark the tenth anniversary of BCLP’s annual publication on the emerging themes affecting the industry and drew on British, European, and American speakers.
Fintech regulation, managing global reporting expectations and new developments in regulatory enforcement were among the main themes discussed at the seminar.
Addressing the future EU/UK relationship post-Brexit, Delfas said: “It’s not about whether we have identical rules but whether they have the same common, substantive outcomes”. She said this was established EU practice, which the FCA supported.
She added that the UK and EU shared a wide range of common concerns, including: the fight against money laundering; financial innovation; sustainable finance; and the future regulation of crypto assets.
Subsequent discussion encompassed the developing fintech revolution. BCLP’s London and Washington DC presenters stressed the challenge regulators faced keeping pace with the industry.
London-based partner Daniel Csefalvay said a measured approach was needed to ensure regulators understood the underlying technology and the risk factors involved before attempting to regulate fintech.
Washington DC-based banking partner Ben Saul acknowledged that regulators were more reactive than proactive and focused on those areas where technology may be vulnerable to malign interests: such as money laundering, sanctions and cryptocurrency.
Communication, co-ordination, and combined decision making were all key to making risk management a reality.
The event also discussed global reporting expectations, both from a regulatory perspective, in terms of expressed FCA priorities, and from a risk management one, given the prevalence of whistle-blowers and intra-regulatory communications.
The seminar heard that culture and non-financial misconduct were very much on the regulatory radar while the onus was on companies to self-report, presenting them with a major challenge given the patchwork quilt of multinational reporting obligations, according to Mukul Chawla QC, BCLP’s chief criminal counsel.
Ashley Ebersole from BCLP’s Washington DC arm highlighted the role of co-operation programmes in encouraging self-disclosures, as well as the associated public information requirements that flowed from disclosure obligations to shareholders.
The discussion closed with a consideration of trends in regulatory enforcement, both in the UK, and elsewhere. Workplace conduct featured prominently.
London partner Polly James said non-financial misbehaviour was now seen as equally as important as, for example, market abuse.
That meant an even greater focus on senior managers and work culture, even to the extent of encouraging ‘psychological safety’ and protecting whistle-blowers who report issues.
As Nathan Willmott, who co-heads the firm’s white collar group, concluded: “There is a lot to absorb, in terms of the global consequences for our firms of issues in a range of jurisdictions and how to manage them collectively. This continues to be a time of significant change and this pace of change is one consistent theme we’ve seen over the past decade.”