The House of Lords EU Financial Affairs Sub-Committee has launched a new inquiry into the financial regulatory and supervisory landscape of a post-Brexit Britain, designed to examine how insurers, reinsurers, and banks could maintain EU market access.
The inquiry will look at how regulation and supervision might evolve post-Brexit, in order to secure financial stability and importantly, to keep close relationships with EU regulations and supervisions in order to maintain market access.
According to Reuters, Kishwer Falkner, the Sub-Committee’s Chairwoman, called for cooperation between UK and EU supervisors, and urged Britain to maintain its global standard-setting practices to ensure market access.
“We would like to explore the options for such engagement,” said Falkner, as reported by Reuters.
An announcement by the Sub-Committee reveals that the inquiry will consider a range of areas, including the potential for the UK to develop its own regime post-Brexit and foster innovation, while maintaining market access; looking at whether equivalence is actually the best approach to achieving continued cooperation and if other forms of alignment do exist; to explore differences between UK and EU regimes in financial regulation and to explore any gaps; if it would be a benefit to the UK to deviate from any current EU framework; and whether any regulatory divergence, and shared supervisory concerns, can best be managed, including mechanisms for dispute resolution.
A number of insurers, reinsurers and banks have already established subsidiaries in remaining EU countries in response to the UK’s vote to leave the EU, and amidst uncertainty as to exactly what the financial regulatory and supervisory landscape might look like post-Brexit, the financial sector is eager for more clarity and for the government to secure some kind of transition period.
The Sub-Committee explains that written evidence for the inquiry is sought by September 29th, 2017, and that public hearings are expected to begin in September. The government is to respond to the inquiry, and the issue may be debated in the House.
