City regulators push for ‘unprecedented’ powers in the event of no deal Brexit

The City's financial regulators have urged Parliament to hand them “unprecedented” powers to keep the UK open for business in the event of a no-deal Brexit.

Financial Conduct Authority (FCA) chief executive Andrew Bailey told the Treasury Select Committee transitional powers were needed to “fix an emergency” as he pleaded the case alongside City minister John Glen and Prudential Regulation Authority chief executive Sam Woods.

They said 53 “statutory instruments” would be needed – more than 2,000 pages – to create a fully functioning financial services regime in the UK, essentially transferring EU regulations into UK law.

The trio of financial heavyweights said there was not enough time for firms to prepare for the raft of changes and that enforcing all the new regulations on the same day – 29 March – was impossible.

Their comments came just 59 days ahead of Britain’s scheduled date of exit from the EU and as Parliament debated how to break the Brexit deadlock.

If approved the FCA and PRA would have discretionary power over regulation for up to two years, without having to sign off individual statutory instruments through Parliament.

It is hoped directives on the remainder of the statutory instruments would be published by the end of February.

But Woods said that was too late ahead of 29 March.

He said: “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 transitional powers and onshoring regulation would be relevant for companies whose corporate domicile would be in the UK, as those with London subsidiaries would be covered by the already agreed temporary permissions regime.

Glen told the committee the City was a global financial centre and a desirable place for businesses to be.

He added it was “inconceivable” that that would change even in the event of a no-deal Brexit.

Bailey told the committee that negotiations with EU regulators, as well as regulators across the bloc’s 27 other member states were continuing.