Bank of England and Financial Conduct Authority – Memorandum of Understanding on the supervision of financial market infrastructure and payment systems

The Bank of England’s Prudential Regulation Authority (PRA) has issued a press statement to inform of the findings from a recent review of its Memorandum of Understanding (MoU) concluded by the PRA itself and the Financial Conduct Authority (FCA) as regards the supervision of financial market infrastructures.
Having engaged with firms dedicated as financial market infrastructures (FMIs), such as central counterparties, recognized investment exchanges, and central securities depositories, to hear about the effectiveness of the joint supervision and having reviewed the level and effectiveness of the cooperation arrangement, both regulators concluded that the provisions in the MoU for cooperation remain effective. This comes despite the fact that two firms noted a lack of consistent approaches in the review of material and a lack of coordination between the regulators, which raised regulatory burdens of the affected company.
Also, FMIs urged the regulators to closely collaborate on upcoming priorities in the financial market, such as the implementation of the Financial Services Markets Act 2023 and the establishment of global standards for operational resilience.
To conclude, the PRA states that the Bank and FCA will continue to „enhance co-operation and address any specific areas identified by firms“. Additionally, the authorities have made slight revisions to the MoU to ensure it stays relevant amidst regulatory shifts towards own UK legislation following UK’s exit from the European Union.