European Union Committee
Brexit: the future of financial regulation and supervision

11th Report of Session 2017-19 - published 27 January 2018 - HL Paper 66

Contents

Summary

Chapter 1: Introduction

The future of financial regulation and supervision post-Brexit

The purpose of the inquiry

The EU Committee’s work

Chapter 2: The origins of regulation and supervision

A multi-level regulatory system

International standards

Box 1: International standards setters

The EU’s regime

Box 2: EU legislation granting passporting rights

International standards and the EU

The distinctiveness of the UK’s regime

The UK’s role in shaping standards

Conclusions and recommendations

Risks of divergence from international standards

Conclusions and recommendations

Chapter 3: Incorporating the EU acquis in financial services

The EU (Withdrawal) Bill

Incorporating the Lamfalussy framework

Box 3: The Lamfalussy architecture: level 1, 2, 3, and 4 financial services regulation

Unknowns and inoperables

Conclusions and recommendations

Future parliamentary scrutiny

Conclusions and recommendations

Chapter 4: Possibilities for a transition period

The Committee’s letter to the Chancellor of the Exchequer on the need for a transition

The need for a transition and implementation period

Conclusions and recommendations

Making and averting contingency plans in financial services

Timing and form of an agreement

Contractual continuity

Conclusions and recommendations

Chapter 5: Alignment and market access

Developments in the Government’s negotiating position

Equivalence and its limitations

Table 1: Third country equivalence provisions

Conclusions and recommendations

Political possibilities for a free trade agreement

Mutual access and alternatives to equivalence

Conclusions and recommendations

Divergence and the architecture of market access

Conclusions and recommendations

Chapter 6: Supervisory cooperation

The terrain of supervisory cooperation

The review of the ESAs

The challenges and opportunities of joint supervision: CCPs

Conclusions and recommendations

Chapter 7: Regulatory innovation, FinTech and the future

Areas where autonomy would be desirable

Solvency II

Conclusions and recommendations

Regulatory burdens on smaller firms

Conclusions and recommendations

FinTech and innovation

Conclusions and recommendations

The future role for UK regulators

Conclusions and recommendations

Summary of conclusions and recommendations

Appendix 1: List of Members and declarations of interest

Appendix 2: List of witnesses

Appendix 3: Call for evidence

Appendix 4: Correspondence with the Chancellor on transition

Appendix 5: The impact of Brexit on the financial services sector

Appendix 6: Glossary

Evidence is published online at https://www.parliament.uk/financial-regulation-supervision-inquiry-lords and available for inspection at the Parliamentary Archives (020 7219 3074).

Q in footnotes refers to a question in oral evidence





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