Britain to use Brexit 'flexibility' to make City of London more attractive

LONDON (Reuters) – Britain will use its freedom from European Union rules to regulate markets flexibly and make the City of London even more attractive to global investors, the Financial Conduct Authority said on Tuesday.

Britain’s financial sector has been largely cut off from the bloc since full Brexit on Dec. 31, with no sign of increased direct access any time soon as the EU builds up capital market autonomy in stock and derivatives trading.

Nausicaa Delfas, who heads up the FCA’s international division, said Britain’s financial market has entered a “new phase”, but would remain open to the world and built on “robust” standards.

“Our new found position allows the FCA to have a new, more nimble approach to domestic policymaking. We can focus on using this new flexibility for the global markets that we host in the UK,” Delfas told a City & Financial conference.

“The departure from the EU presents us with opportunities to do things differently, and that is an opportunity we will grasp.”

The FCA has begun easing curbs inherited from the EU on “dark” or anonymous, off-exchange trading in blocks of shares.

EU firms with operations have applied for a permanent UK licence, but Delfas cautioned that authorisation would only be granted if there are good relations with their home regulators.

Britain and the EU has agreed a new framework for regulatory cooperation but it only makes provision for informal, non-binding talks twice a year.

Many financial firms in London have opened hubs in the EU to avoid disruption from the lack of direct City access to the bloc, creating tension between regulators over sufficient staffing at the new EU and existing UK operations.

Delfas said the FCA continues to expect firms to discuss any transfer of functions and staff from the UK that have not been previously agreed.

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