European regs must continue despite Brexit

European regulations including EMIR and SFTR should continue if Britain is to retain financial industry.
By Paul Walsh
An Abide Financial whitepaper assessing the future of UK financial services post-Brexit, states that existing regulations such as European Market Infrastructure Regulation (EMIR) and Securities Finance Transaction Regulation (SFTR) must be retained to continue cross border trading with counterparties in the rest of the EU.

Under current EMIR reporting regulations, a firm in one member state can manage its business on an EU-wide scale without having to seek local regulatory authorisation from other EU states.

The paper states that for this reason it is ‘particularly important’ that UK investment firms prepare for and implement EMIR throughout the Brexit transition.

EMIR regulations are set to go live in Q3 2017 and SFTR is estimated to go live in either Q1 or Q2 of 2018.

The UK’s decision to leave the EU at the end of June has caused increased industry debate on the future of UK financial services

Research by NN Investment Partners last month revealed that investors are reducing their risk appetite in the wake of Brexit and the global uncertainty it has caused.

NN’s Risk Rotation index saw a significant reduction in risk appetite when it surveyed firms in August 2016, two months after the UK voted to leave the EU.

The whitepaper also indicated that UK firms face an additional level of complexity to their operations due to Brexit uncertainty; and that maintaining the UK’s position as a global financial hub will require ‘consistency with international standards in global markets.’