FIA has submitted its response to HM Treasury’s reform proposals concerning the Bank of England's regulation of central counterparties and central securities depositories. The proposals are part of the UK's Financial Services Future Regulatory Framework Review.
Overall, FIA is supportive of the proposals and agrees the primary objective of the Bank should remain financial stability. However, an integral element of the clearing and settlement services that the Bank will be supervising is their international nature.
FIA believes this should be recognised within the legislative framework as a key secondary objective which requires the Bank to take into account the international context in which UK CCPs and CSDs operate. FIA believes this is required to ensure the UK maintains a proportionate regulatory framework aligned with international standards.
FIA members have reservations regarding the creation of new rulemaking powers which extend the application of UK rules to the clearing activities of non-UK CCPs. In line with international principles, FIA encourages the Bank to rely on regulatory deference and cooperation when looking at cross-border regulation of CCPs.
When it comes to increased transparency with external stakeholders, FIA encourages the Bank to work with small groups of CCP and CSD members, as well as clearing members, to gather input on a regular basis and to facilitate an open and continuous supervisory and regulatory dialogue.
Read the full response.
