FCA warns of financial crime risks post-Brexit

The Financial Conduct Authority has warned that the UK will be unable to manage the risk of financial crime under a no-deal Brexit. 

Speaking at the watchdog’s annual general meeting, FCA chair Charles Randall stressed the importance of cross-border data sharing agreements with EU.

At the start of the summer we had routed some 3.1 billion transaction reports, since January, to other National Competent Authorities. A process achieved via the European transaction reporting exchange mechanism.

Randall suggests that the UK cannot manage the risks of financial crime successfully unless ‘we can share data in this way’.

In his speech, he said data sharing provides both the UK and EU countries with a ‘vital foundation’ to tackle cross-border market abuse, including insider dealing and cross-market manipulation.

“If we want to reduce the human costs associated with problems like fraud and money laundering, the UK is, and must remain, an inhospitable place for financial crime,” Randall added. “And the FCA pursues this goal by operating an extensive programme of supervisory and enforcement work.

“This means we work hard to strengthen the sector’s resilience to crime through our systematic anti-money laundering programme and awareness-raising around issues like fraud. And we also conduct a significant volume of enforcement work against firms and individuals.”

Last month, the Financial Conduct Authority set its sights on tightening up regulation of the e-money sector.  In a statement, the FCA said it is consulting on rules and guidance to improve conduct standards and communications in the payment services and e-money sectors. Its new Consultation Paper states it is looking to cover wider categories of businesses that it regulates, including businesses authorised or registered under the Payment Services Regulations or the Electronic Money Regulations.

The FCA also recently proposed tough new regulations regarding peer-to-peer (P2P) lending platforms. The changes are designed to address the ways in which the loan-based crowdfunding model has developed since the FCA last reviewed the sector in December 2016. After observing the variety of loan-based crowdfunding business models, some of which have become increasingly complex, the FCA is now inviting responses to a number of specific proposals to change the rules.