The Bank of England said on Tuesday it was launching a consultation on proposed post-Brexit rules for clearinghouses, payment system operators and other financial market infrastructure to improve transparency.
The BoE said the consultation on its new Core Rules represented its first use of new powers to make legally binding regulation for central counterparties and central securities depositories in Britain.
The new rules – which Britain can now set itself after leaving the European Union – will also apply to British payment systems regulated by the BoE and specified service providers.
“Building on the strong foundation we already have, we take this opportunity to be clear about what we expect from the companies we oversee,” Sarah Breeden, the BoE’s deputy governor for financial stability, said in a statement.
“Together with our updated approach to supervision, it marks the Bank’s next stage in designing an agile, effective and forward-thinking regulatory regime, with more to come in the near future.”
The consultation will run until February 19, the Bank of England said.
Guest 2: Mark Thompson, a regulatory expert at the Financial Conduct Authority (FCA)
Thematic Section 1: The Impact of Brexit on Financial Regulation in the UK
Guest 1: Dr. Andrew Malcolm, a senior lecturer in economics at the London School of Business
Guest 2: Jane Williams, a financial analyst at HSBC Bank
Q: How does the Bank of England’s new authority to set legally binding regulations for clearinghouses and other financial market infrastructures post-Brexit affect the UK’s financial sector?
Dr. Malcolm: This new power allows the Bank of England to tailor financial regulations more closely to the UK’s specific needs, potentially leading to a more competitive and innovative financial industry. However, there’s still some uncertainty about how these rules will interact with regulations set by other countries, particularly the EU.
Jane: The ability to set its own regulations should give the UK greater flexibility in shaping its financial sector. Clearinghouses and payment systems are crucial components of the financial system, and ensuring their stability is essential. This consultation is a positive step towards that goal. However, we need to ensure that we don’t become overly reliant on our domestic market and lose access to international markets.
Q: How will the new Core Rules affect transparency and supervision in the financial sector?
Dr. Malcolm: The Core Rules aim to strengthen transparency and improve disclosure requirements for clearinghouses and payment systems. This should lead to better oversight of these critical infrastructures and mitigate potential risks. The Bank of England’s updated approach to supervision also demonstrates a commitment to proactive regulation and a more forward-thinking regulatory regime.
Jane: The consultation is an opportunity for stakeholders to provide input on the new rules, which should lead to a more robust and effective supervision framework. Improved transparency will benefit not only regulators but also market participants, increasing confidence in the financial system. Collaboration with international partners remains essential to ensure consistent regulation and minimize fragmentation.
Thematic Section 2: The Significance of the Bank of England’s Post-Brexit Role
Guest 1: Pauline Carr, a professor of
