Morgan: Brexit will have a significant and long-lasting impact on the financial services sector
The Treasury Select Committee has launched a new inquiry into the future of the UK’s financial services once it has left the European Union.
The inquiry will look into the potential impact of whether the UK converges, diverges or seeks equivalence with the EU once it leaves on 29 March.
Furthermore, it will also seek to conclude whether it is in the long-term interests of the UK to align closely with EU financial regulation or to move away and pursue trade with other third countries.
This also includes judging whether the UK should maintain current regulatory barriers that apply to these countries.
The financial services sector has had a say on the UK’s future regulatory relationship with the EU along with ministers, regulators and officials.
Nicky Morgan MP (pictured), who chairs the committee, commented: “London is the world’s premier financial centre, and many of us want to keep it that way.
“Brexit will have a significant and long-lasting impact on the financial services sector, including the insurance, retail banking and asset management sectors, in the UK, the EU, and potentially the rest of the world.”
Last November, Morgan revealed the committee’s plans of the inquiry.
It coincides with plans at the Financial Conduct Authority – which is set to be handed a raft of new powers post-Brexit – to rework its rules handbook to fit the UK’s regulatory priorities when the country leaves the EU.
Tom McPhail, head of policy at Hargreaves Lansdown, commented: “Much of the UK’s financial regulation has evolved under the canopy of European institutions.
“We are entering uncharted waters, in terms of how our regulation is structured and what we want it to do, so this is a welcome and timely inquiry.
“We are particularly interested to look at regulations around how investors are informed about the costs, risks and benefits of financial products and whether these can be improved; it is vital customers are well-protected but it is also essential the system of protections encourages them to save and invest for their future with confidence.”
Earlier this month, new research from EY found almost half of the UK’s largest asset and wealth managers have, or intend to, move staff or operations out of the country to a EU27 domicile as a result of Brexit.