Draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017

George Kerevan Excerpts

Tuesday 14th March 2017 General Committees

[George Kerevan (East Lothian) (SNP)]

It is a pleasure to serve under your chairmanship for the first time, Mr Flello. I will be quite brief.

The principles behind MiFID II are laudable. Europe’s trading market is very fractured, which has limited the ability to mobilise capital across the European boundaries. It is particularly of interest therefore in the UK, where much of the capital is centred to operate more freely across Europe. The basic thrust of MiFID II is very acceptable. The obvious question to the Minister is: post-Brexit, can he guarantee that the broadening of the market base we are getting here, and with it acceptable regulation on bond traders, will continue? We need assurance on that. Given that the market has spent such an effort in time and money to get to this stage of MiFID II, to row back would be a bad thing.

There is, however, much talk in financial circles of a “MiFID III”. The American regulating authorities have been talking for some time about trying to go even further in trading regulation, to take us beyond what would be necessary and to impose costs, which most of the industry across the UK thinks would be invidious. Again, it is for the Government to ensure that, post-Brexit—all things being equal, and leaving aside recent events north of the border—if the UK found itself in a situation where it was negotiating directly with G20 and various international agencies regarding a prospective MiFID III, companies and traders operating in the UK would not be subject to further, more intensive regulation that suited the American market rather than companies here in Europe. Those are the basic points. The detail of the arrangements that have been negotiated is quite acceptable.

[The Chair]

I remind hon. Members to rise from their seats if they wish to catch my attention; that would be helpful.