The House of Lords EU Financial Affairs Sub-Committee (Committee) has published a call for evidence announcing it is launching an inquiry into financial regulation and supervision following Brexit.
The Committee explains that given the uncertain context, it is important to gain a clear picture of the UK’s current regulatory regime, with a view to understand how EU rules will be embedded via the European Union (Withdrawal) Bill, and whether any changes may be made to the status quo in the near term. Questions also remain over how the UK’s supervisors will work with their EU counterparts in the future, and how the newly domesticated regime will be managed, not least with respect to the potential emergence of a cross-border banking crisis and the supervision of market infrastructure.
The Committee will therefore examine how financial regulation and supervision can evolve following Brexit in order to ensure financial stability. The inquiry will encompass an assessment of not only the body of regulation, but also the institutional structures that support it. The Committee will consider in particular the following areas:
- the scope for the UK to adapt its own regime to new circumstances post-Brexit and foster innovation, while still maintaining market access;
- whether equivalence is the best means to achieve continued cooperation, and what other forms of alignment could exist;
- differences between the UK, EU and international regimes in financial regulation and where gaps exist;
- whether there are areas in which it could be beneficial for the UK to deviate from the EU’s current framework in future; and
- how any regulatory divergence, and shared supervisory concerns, can best be managed, including mechanisms for dispute resolution.
The Committee is also seeking evidence on the following issues:
- current regulatory regimes;
- transition, equivalence and alignment;
- the future environment; and
The deadline for comments on the call for evidence is 29 September 2017. Public hearings are expected to begin in September 2017. The Committee aims to report to the House, with recommendations, in late 2017 or early 2018. The report will receive a responses from the Government and may be debated in the House.