(5 years, 8 months ago)
General CommitteesIf the powers are temporary, it would be helpful to know what kind of regime we would have in the long term in the event of a no deal, and whether that would still make us competitive in this area.
This SI onshores the existing MiFID II regime under the terms of the European Union (Withdrawal) Act 2018. Circumstances that the Government do not wish for—no deal—would clearly necessitate additional legislation in the next Session. I am working with officials to develop that legislation, so that we would maintain the most competitive regime possible in a no-deal situation, but that falls without the scope of this statutory instrument.
In a no-deal situation, there will be a variety of scenarios with respect to the nature of our relationship with the EU; the calibration of our long-term competitive regime for financial services would depend on the calibration of that relationship, and legislation would be brought forward in the light of that.
I will make progress. To be clear, the intention in granting these temporary powers is to enable the FCA to operate the transparency regime in the UK from exit day and beyond, and to maintain existing outcomes, as far as that is reasonably possible. The 2018 Act does not empower the Government to make non-deficiency-related policy changes to EU legislation. If the Treasury is satisfied that the FCA is ready to undertake its transparency functions, the four-year transitional period may be ended earlier by the Treasury by the issue of a direction that must be laid before both Houses and published.
Some longer-term flexibility will also be given to the FCA to reflect the fact that it may not have access to pan-EU trading data after exit, and therefore may need to use reliable trading data from other countries when calculating certain transparency thresholds.