UK throws out EU guidelines

The UK’s new markets watchdog has for the first time formally rejected EU financial regulation guidance, instead approving looser restrictions on bankers and brokers, as part of a government-backed “tougher stance on Europe”, writes the Financial Times.

The Financial Conduct Authority (FCA), which launched in April, had already indicated it disagreed with two parts of the EU’s banking guidance. In May, it announced it did not agree with the European Securities & Markets Authority’s (Esma) rules on short selling stocks – a clause that Germany, Denmark, France and Sweden also threw out. On August 15, the FCA said it disagreed with a clause that would have forbidden bankers from offering both Alternative Investment Fund Management services and brokerage services.

It is the latest in a series of spats between Brussels and the City, London’s banking centre, over regulation of the financial services sector, a key element of the UK economy.

The economic daily said both the FCA and the UK’s finance ministry, the Treasury, “downplayed a possible split with Europe on financial regulation”, adding that Esma said member states were entitled to disagree with guidance. The newspaper continues —

Several London bankers and investment managers linked the FCA’s changed attitude to the government’s tougher stance on Europe. [...] Some in the City say they hope the UK will also reject other EU guidance, including the European Banking Authority’s tougher than expected rules on new EU bonus restrictions.