The Australian Securities and Investments Commission (ASIC) and the UK Financial Conduct Authority (FCA) have vowed to maintain a close relationship regardless of the latest Brexit developments.
Both authorities have committed to strengthening cooperation post-Brexit. The regulators agreed to two memoranda of understanding, ensuring a continuity of their relationship once the UK leaves the European Union. The MoUs cover trade repositories and alternative investment funds (AIFs).
Cross-border cooperation between the FCA and ASIC is essential within the framework of G-20 discussions. Both regulators support the continuity of existing equivalence decisions to provide certainty to businesses after Brexit.
Commenting on the news, the Chief Executive of the UK FCA, Andrew Bailey, said: “The FCA and ASIC have always had a strong relationship, which will continue after Brexit. The MoUs we have agreed today will ensure the FCA and ASIC have an uninterrupted exchange of information and can supervise the cross-border activity of firms.”
“We also support the continuity of existing equivalence decisions which will minimize disruption for firms in the UK and Australia,” Bailey elaborated.
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Product Intervention Powers
The news comes as the Australian parliament last week approved new product intervention powers for the ASIC. The close contact between European and Australian financial regulators is likely to be a factor when the newly minted powers of the local watchdog become activated.
While the MoUs are related to trade repositories and Alternative Investment Funds (AIFs), the cooperation between the FCA and ASIC appears to be likely in the regulation of retail products.
That said, Australian regulators could take a cue from some controversial decisions on the part of the ESMA and the FCA in Europe, which led to a business drive offshore.
Commenting on the MoUs, the Chair of ASIC, James Shipton, said: “ASIC is pleased to have cooperation arrangements in place with the FCA on trade repositories and alternative investment funds. While the FCA and ASIC have always maintained a very close relationship on supervisory and enforcement matters, these two MOUs will enhance cooperation and information sharing between the authorities.”
The MoUs will come into force on the date EU legislation ceases to have a direct effect in the UK.