Open markets and common causes: International collaboration and the modernisation of financial services regulation in the UK

Mr. Ashley Alder, Chair of the Financial Conduct Authority (FCA), delivered a speech at the Eurofi conference in Santiago de Compostela on September 13, 2023 in which he particularly described the way forward of the UK financial market following the exit from the European Union. The key points are briefly summarized below:
(1) Collaboration with EU and Global Partners: Mr. Alder emphasized the importance of working alongside EU and global partners to pursue sustainable economic prosperity and address financial sector risks. He stressed the need for efficient international investment flows and cooperation to manage risks that often transcend borders, benefiting both EU and UK businesses.
(2) UK-EU Memorandum of Understanding (MoU): Mr. Alder welcomed the recent signing of the UK-EU MoU on Regulatory Cooperation in Financial Services, acknowledging the high level of interconnectivity between EU and UK financial services. He expressed optimism about the benefits this cooperation would bring and looked forward to the first Regulatory Forum.
(3) Climate Action: Mr. Alder discussed the urgency of international climate action, especially in the wake of recent climate-related events in Europe. The FCA is committed to strengthening the regulatory framework for sustainable finance, focusing on building sustainability-related reporting standards to address the global climate emergency. He highlighted the endorsement of climate reporting standards by IOSCO and the importance of aligning these standards with EU sustainability disclosure initiatives.
(4) Crypto Regulation: Mr. Alder recognized the need for international coordination in regulating crypto to protect consumers and market integrity. He mentioned the collaboration within IOSCO’s Fintech Task Force to develop global standards for crypto and digital assets, emphasizing the importance of such standards following issues with prominent crypto businesses.
(5) Non-Bank Financial Intermediation (NBFI): Mr. Alder discussed the importance of cooperation and data sharing among regulators and market participants in managing risks in NBFI activities. The FCA is actively involved in developing policy proposals for NBFI with European partners and contributing to the Leverage Working Group of the Financial Stability Board (FSB).
(6) UK Regulatory Reforms: Mr. Alder highlighted the new Financial Services and Markets Act, which reshapes the FCA’s remit. He emphasized the need for an agile and coherent UK financial services regime that aligns with international standards and considers the costs to globally active firms. He also noted that the EU and UK are pursuing similar reforms in various areas, showcasing opportunities for mutual learning and alignment.
(7) ESG Regulation: Mr. Alder mentioned the UK’s ESG labelling proposals, emphasizing the importance of international consistency in UK regulation. He stated that the UK’s requirements would go beyond EU ESG classifications to provide more clarity for consumers and expressed a willingness to work with the European Securities and Markets Authority (ESMA) on ESG naming and disclosure proposals.