‘Firms should make own decisions on location after Brexit’

THE boss of Britain’s finance watchdog said authorities should not have the power to dictate where companies are located once Brexit is enforced.

Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), called for markets to remain open so firms can shape their own destiny, and said “no good” would come of relationships breaking down between UK and European regulators.

It comes after Mr Bailey told the Financial Times last week that the FCA has already been locked out of some Brexit talks by its European equivalents.

Speaking in London, he said his job was not to plead for the financial services industry, but to ensure the integrity of markets, strong competition and the fair treatment of consumers.

He said: “Firms should be able to take their own decisions on where they locate, subject to appropriate regulatory arrangements being in place which preserve the public interest.

“Authorities should not dictate the location of firms; rather, we should allow open markets to shape those choices, always subject to our public interest objectives.”

Finance firms based in London have been forced to relocate some of their operations to rival financial centres as uncertainty looms over their trading rights with Europe if Britain exits the single market. However, Mr Bailey has called into question the need for companies to move services in order to trade freely after Britain’s EU divorce.

He said: “Does Brexit have to mean abandoning the benefits of free trade and open markets in financial services? It should not. Does it require membership of the single market to get the benefits of free trade with the EU? No.”

The City of London also faces the prospect of major disruption if the EU attempts to prise the clearing of euro denominated derivatives from the capital and move it back within the trade bloc following Brexit.

Mr Bailey said EU clearing in London already showed that regulatory co-operation was “perfectly possible”.

“This type of agreement can be backed up by effective joint supervisory oversight, something that is very clearly preferable to the cost and risk that is introduced by a location-based policy,” he added