The European markets regulator has expressed concern UK finance companies could make use of loopholes between the UK and EU after Brexit, according to the Financial Times.
Speaking at a conference in London, the European Securities and Markets Authority chair Steve Maijoor said this was one of the reasons Esma is seeking to directly supervise non-EU firms.
He said there was a risk of “regulatory competition” where an outcome-based system is used.
According to the Financial Times, the comments from Maijoor came in response to FCA executive director of strategy Chris Woolard who, talking at the same event, said the risk of UK companies exploiting loopholes was low because there will be no “bonfire of regulations” after Brexit.
The FCA chief Andrew Bailey had previously hinted the UK would move from rule-based to outcome-based approach to regulation last month.
Last summer, the UK government moved away from mutual recognition of regulation after exiting the EU, instead pursuing an arrangement that will see financial services companies having scaled-back access to each other’s markets.