The financial regulators of the City have requested that the Parliament hand them “unprecedented” powers to keep the United Kingdom open for business in case of a no-deal Brexit.
Andrew Bailey, the chief executive of the Financial Conduct Authority (FCA), told the Treasury Select Committee that transitional powers were necessary to “fix an emergency” as he presented the case alongside John Glen, a City minister, and Sam Woods, the chief executive of the Prudential Regulation Authority.
They said that 53 “statutory instruments” would be required – over 2,000 pages – in order to create a fully functioning financial services regime in the United Kingdom, essentially transferring the regulations of the European Union into UK law.
The trio of financial heavyweights said that there was not enough time for companies to prepare for the series of changes and that enforcing all the new regulations on the same day – the 29th of March – was not possible.
Their comments came just 59 days ahead of the scheduled date of exit of the United Kingdom from the European Union and as the Parliament debated how to break the Brexit deadlock.
If approved, the PRA and the FCA would have discretionary power over the regulation for a maximum of two years, without having to sign off individual statutory instruments through the Parliament.
It is expected that the directives on the remainder of the statutory instruments would be published by the end of next month.
However, Woods said that it was too late ahead of 29 March deadline.
He stated: “It’s a massive operation and the reason we need these powers is that, despite the very fast and hard work done by everyone involved, these changes are going to be put down quite late before exit day.”
The said transitional powers and onshoring regulation would be important for firms whose corporate domicile would be in the United Kingdom, as those with London subsidiaries that would be covered by the already agreed temporary permissions regime.
Glen informed the committee that the City was a global financial centre and a desirable place for businesses to be.
He said that it was “inconceivable” that the situation would change even in the event of a no-deal Brexit.
Bailey informed the committee that the negotiations with the regulators of the European Union, as well as regulators across the 27 other member states of the bloc, were continuing.