Deal or no deal, UK financial regulation will get tougher post-Brexit
UK financial regulation will get tougher post-Brexit
Deal or no deal, UK financial regulation will get tougher post-Brexit.
UK financial services regulation may alter but it won’t ease in a post-Brexit world according to a new report from KPMG “The future shape of UK FS regulation: Rule taker or rule maker?”.
Whilst the UK regulators have been explicit that they will not deviate from EU regulatory standards, the UK’s departure from the EU leaves considerable scope for divergence. Simply the initial task of rewriting EU rules into UK legislation will lead to a host of tweaks and edits – it won’t be possible simply to ‘copy out’ all the rules. However, while there are a few areas of regulation where the UK has taken a more light touch approach, there are many more examples of the UK applying more stringent rules or leading the regulatory response to emerging conduct issues*. This long history of “super-equivalence” is unlikely to change, meaning UK financial regulations will only get stricter in future.
Supervisory priorities around operational resilience - checking firms are braced to protect against, and respond to, cyber-attacks or technology failures - are already increasing. Today’s report highlights six likely areas of focus for future UK financial regulation: financial stability, consumer protection, Fintech, UK competitiveness, the impact of post-crisis reforms and the pursuit of social objectives.
Julie Patterson, Regulatory Insight Centre, KPMG UK, comments:
“Seven in 10 UK consumers believe we will leave the EU without a deal. Achieving a financial services deal seems increasingly unlikely. This may leave considerable scope for regulatory change.
“The regulators on both sides have been clear they don’t want regulatory arbitrage, but the UK has in the past taken a different path, such as being the only country in the EU27 to ring fence its banks, and that trend will become more common when we are no longer in the EU. I see no sign that the UK regulators’ tendency to lead the debate on risk and conduct issues will abate so regulation may become more demanding, not less.”
Notes to editors
*See some examples of regulations where the UK has veered from the EU standards on P6 &7 of the report.
Christina Bridge, Senior PR Manager
T: +44 (0) 7789 504 905
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.