The UK’s Financial Conduct Authority (FCA) has signed two Memoranda of Understandings (MoU) with the Australian Securities and Investments Commission (ASIC) to ensure continued interactions following Brexit.
These new MoUs cover trade repositories and alternative investment funds (AIFs), and will implement procedures for cross-border co-operation between the FCA and ASIC.
The MoU on trade repositories was needed because in the event the UK leaves the EU, the FCA will acquire the functions and supervisory powers for them. Currently, trade repositories are supervised by the European Securities and Markets Authority (ESMA).
In the agreement, ASIC can continue to access data on derivatives contracts held in UK trade repositories, where the information is needed for the ASIC to accomplish its mandates.
The MoU regarding AIFs has been updated to reflect the regulatory regime that will apply to AIFs in the UK after Brexit. Through this MoU, the FCA and ASIC will collaborate to ensure alternative investment fund managers (AIFMs) and AIFs can operate across borders.
It will cover Australian managers that manage or market AIFs in the UK and vice versa, as well as their delegates and depositaries.
HM Treasury has confirmed that existing equivalence decisions granted in relation to Australia by the European Commission will be replicated into UK law and continue to operate following Brexit. The UK is set to adopt existing EU equivalence decisions which relate to Australia’s supervisory and regulatory regime for trading venues, OTC derivatives markets and credit rating agencies.
In a similar manner, the ASIC is taking steps to continue the same equivalence of the UK’s regulatory and supervisory regime.
FCA chief executive 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 uninterrupted exchange of information and can supervise cross-border activity of firms. They provide a strong signal to the markets that the UK will continue to play an important role after Brexit. The MoUs will also provide much-needed assurance to our regulated stakeholders.
“We also support the continuity of existing equivalence decisions which will minimise disruption for firms in the UK and Australia.”
Earlier in the month, the FCA signed two MoUs with the US Securities and Exchange Commission to reaffirm co-operation after Brexit.
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