Financial services firms in the U.K. are not happy with how
their market regulator, the Financial Conduct Authority, has
communicated with them about the countrys plans to leave
the European Union, according to a new survey published by the
The regulators annual Practitioner Panel research survey, which polled 2,080 FCA-regulated
businesses across all financial sectors and was published on
Wednesday, found that the volume of regulatory change
surrounding Brexit has weighed heavily on firms
resources, and regulated businesses want the FCA to be more
transparent about its plans.
Only 14 percent of respondents agreed that the regulator is
communicating effectively with firms about the process of
preparing to leave the EU. Nearly a third of the respondents
disagreed with the statement, while another 53 percent answered
that they neither agree nor disagree or
Andrew Bailey, chief executive of the regulator, said in
todays report that few respondents agreed that the
FCA is currently communicating effectively on Brexit. Clearly
there is more work to be done in this area.
Bailey added in a statement accompanying the report that the
organization had committed to be more transparent
so that firms understand the regulators role.
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A spokeswoman for the Financial Conduct Authority tells
Institutional Investor that the regulator has been
working hard to improve its interaction with the industry on
Brexit-related matters since the survey was conducted in March
One area of particular concern for fund management firms is
over rules governing the sale of funds in Europe after the
country leaves the EU. The survey found that for investment
firms specifically, clarity over passporting the term
for rules that allow U.K. fund managers to offer their products
across borders within the EU remains a top concern.
One in ten investment management firms would like to
see the FCA maintain or improve passporting between
the UK and the EU, the report stated.
The findings come amid increasing calls for transparency
around Brexit in recent days, with Mike Cherry, chairman of the
U.K.s Federation of Small Business, making a press
statement on Tuesday saying that cash from private equity and
venture capital funds could dry up, hitting smaller
companies development, if the rules are not spelled out
Investor appetite is being dampened by uncertainty.
Decision makers need more clarity about the future before they
can plan their next moves, said Cherry in the statement,
adding, Maintaining EU passporting rights for the
UKs private equity and venture capital industries as part
of a transitional arrangement is another must.
Cherrys comments follow a sustained lobbying effort
from Gina Miller, a fund manager and fierce opponent to leaving
the EU. In May, she told Institutional Investor that
quite a number of British entities will be harmed by the
loss of passporting and that firms need to be more
realistic about the access they will have to European states
Elsewhere in the report, pension company views of the
regulator have improved since the last survey was conducted in
2016. This sectors satisfaction with the regulator rose
from 6.9 out of 10 last year to 7.4 this year.
António Simões, chairman of the FCAs
Practitioner Panel which represents the interests of
financial industry practitioners said that it was
encouraging to see that the life and pensions industry had a
more favorable opinion of the regulator.
Last year we identified that there were concerns
around the competition objective, and that the life and
pensions industry was more generally dissatisfied with the work
of the FCA than other sectors, he said in the report.
To see progress against both these points is a sign that
the regulator is heading in the right direction.