View more on these topics

What the EU vote could mean for regulation


Advisers and providers must not halt preparations for Mifid II despite the UK’s exit from the European Union, according to regulatory experts.

It is expected Mifid II will be fully implemented before the two-year negotiation period concludes.

Mifid II, which includes rules around charges disclosure, is expected to be introduced in the UK in January 2018. The European Parliament confirmed the implementation date was delayed from January 2017 in April.

Pinsent Masons financial regulation expert Elizabeth Budd says UK financial services firms must now identify the core requirements of EU regulation and directives that are in their best interests.

She says: “[They must] then lobby the Government to stick to these requirements as they negotiate the terms of the UK’s exit from the EU.”

King and Wood Mallesons partner Tim Dolan explains Mifid II will still need to be implemented.

He says: “Firms will still need to comply with all of the provisions of Mifid II because it is coming into force within the two-year period. Even if we end up in a regime where there is no passport into Europe it may still be the case that the UK Government and regulators decide we want to have a regime that is equivalent to Europe depending on what they negotiate.”

PwC financial services risk and regulation practice partner Laura Cox adds: “Firms will have to keep going. It feels like maybe you should put your pen down at this point but that is not the right answer.

“There are lots of options for where we might end up with an exit. We could go to a Norwegian model where we adopt some pieces of legislation and, in that case, Mifid II would be likely to be one of those [initiatives] that is so embedded in UK law that it would come into the UK virtually wholesale. It is not a time to stop progressing to becoming compliant with that.”

Dolan predicts Brexit will impose a greater workload on the FCA as it considers how European regulations are imposed in the UK.

He says: “[The FCA] will not only have to be supporting Government but it will also need to think about the post-Brexit world and what we will have in place and whether [the regulation] will be equivalent or not.

“The position the FCA and the Prudential Regulation Authority have taken with regard to European regulation has effectively been to copy it out [and that] will not be justifiable in the future. They will have to think about how the regulations are actually applied in Britain. This is all subject to what is renegotiated with Europe regarding Britain’s relationship.”

On Friday, the FCA said financial regulation in the UK that is based on EU legislation will remain in place for the time being.

Apfa director general Chris Hannant says he does not expect a surge in deregulation following the Brexit decision.

He adds: “If we want access to the single market, it is inevitable that Mifid II and the Insurance Distribution Directive will all continue to apply. If we don’t have access, I wouldn’t expect a deregulatory surge from the FCA but there would be more freedom on regulation if they wanted to use it.”



Richard Hobbs: Don’t underestimate UK influence on EU regulation

The people have spoken and we will enter soon a brave new world. After the initial volatility in markets has subsided and politicians have switched on the calming rhetoric we shall begin to see the wood for the trees. The political dynamics of this result are likely to be profound. In any event, an Article […]

FCA interior logo 620x430

Ex-FSA director: We should park FAMR and Mifid II

The referendum has produced a knife-edge result showing a starkly divided UK. The vote Leave means not just Brexit but also a real risk of the UK breaking up, with pressure for another vote on Scottish independence so that Scotland can remain in the EU. This is a double whammy of uncertainty. But it could […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. There are a lot of teddies being thrown out of the prams at the moment. A lot of knee jerk reactions.

    I am not trying to play down the enormity of the exit vote but when every-one stops being a politician and trying to frighten the crap out of every-one, fire and brimstone may not be falling from the sky !

  2. What will be interested is how the government deals with the current EU regulations in the exit period. Directives such as MiFID are already adopted into our own legislation, Regulations have legal effect because of our membership of the EU. Once to 2 year exit period ends, they will no longer have legal force. It will be a mammoth task to enshrine those (which are wanted) into UK law.

  3. interesting not interested.

  4. Why does ANYONE think that we would throw out the regulations on Brexit? Logic needs to be reinserted into these wild speculations… We can reassess which bits work for the UK and which bits don’t and amend them sometime in the next 20 years – the thing to remember is that the changes AFTER Brexit will only be taken up if they come up with something we like – not to have it forced upon us as is current.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm