Exactly six years following the UK voting in a referendum to leave the EU, the House of Lords European Affairs Committee (“Committee”), on 23 June, published a report on the relationship between the UK-EU in financial services sector. We summarise the key points from the report below:
Broadly speaking, the Committee was fairly optimistic about the future of the UK financial services and generally backed the approach that the Government has been taking. It is welcomed that the Committee supported the approach of appropriate divergence and not seeking to rely on EU equivalence decisions – given the limited market access granted by most equivalence decisions. Most firms will support the Committee stating that the Government should ensure that the regulators have sufficient resources. In our view, this is a critical issue, as an application for authorisation, appointing an ARs, and making changes of control, are now incredibly slow processes – often taking many months just to be allocated a case officer. The under-resourcing of the FCA/PRA is having a real impact on firms and is putting the UK at a competitive disadvantage.