The FCA has called on Brussels to offer more equivalence permits to smooth potential disruption to markets if the UK leaves the EU without a deal.

At an event hosted by Bloomberg in London on Monday, Andrew Bailey called on his counterparts to guarantee that investors and banks will have long-term access to London’s critical derivatives trading infrastructure.

The UK and EU are stepping up preparations for a no-deal Brexit on markets, and the EU has handed out temporary “equivalence” rulings that recognise UK markets and infrastructure like clearing houses as being at the same standard. However both sides admit there are some areas where the sides have yet to come to agreement.

The UK is disputing an EU rule that demands some 6,200 stocks that EU-registered investors would have to trade on European exchanges if the UK were to leave the single market without a deal. The ruling has irritated UK regulators and EU fund managers, and they have urged European authorities to further revise their plans by recognising the UK as having “equivalent” standards.

We need to find a way through this together that does not create barriers and distortions on either side. We stand ready to enter into dialogue with our European counterparts before we finalise our approach,” he said. While the FCA had the power to delay the implementation of some rules for share trading markets “we cannot fully mitigate the damage done,” he said.

Mr Bailey also said there would soon be a need to renew the EU’s permit that will let EU investors and banks access UK clearing houses in a no-deal Brexit. The EU’s temporary permit will expire at the end of March. London is the main global centre for trading and clearing of derivatives like swaps and futures

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