The Financial Conduct Authority (FCA) of UK has rejected formal EU guidance on financial regulations, adopting alternative rules that favour bankers and brokers.
The FCA, which was launched in April, has broken publicly with the formal EU interpretation of two different rules in the past three months.
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In late May this year, the FCA has formally rejected the direction on tough new short selling rules issued by the European Securities & Markets Authority. The FCA’s version allowed banks that buy and sell over-the-counter derivatives to seek a market-maker exemption, while Esma did not.
On 15 August 2013, the FCA said it disagreed with a clause that would have forbidden bankers from offering both Alternative Investment Fund Management services and brokerage services under the EU’s markets in financial instruments directive (Mifid) on a cross-border basis.
The move, published in the Financial Times, follows an earlier split with Brussels in May which saw the UK regulator reject Europe’s direction to impose tough new short selling rules.
The FCA’s snub of official guidance has been hailed as the result of political pressure and been described by lawyers as a milestone shift in the UK regulator’s stance.
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By GlobalDataGermany, Denmark, France and Sweden have also rejected part of the short selling guidelines.
"The FCA is fully engaged with Esma’s policy work, and carefully considers each guideline on a case-by-case basis. We have fully complied with all but one of guidelines issued to date," an FCA spokeswoman said.
