Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the role of (1) the European Securities and Markets Authority, and (2) the Financial Conduct Authority, will have in regulating financial markets after Brexit.

The European Supervisory Authorities - which includes the European Securities and Markets Authority - are a part of the EU’s joint supervisory framework for financial services. The UK’s future position outside of the EU will mean that the UK is no longer part of the joint supervisory framework.

As part of preparations for leaving the EU in any scenario, HM Treasury has delivered a programme of legislation under the EU (Withdrawal) Act designed to ensure that the UK’s regulatory regime is workable. These preparations include transferring certain regulatory and supervisory functions currently carried out by the ESAs to the appropriate UK regulator, including the FCA, where the transfer of those functions is necessary to ensure an operable regulatory regime at exit.

If the UK leaves the EU under the terms of the Withdrawal Agreement reached between the UK and the EU, the UK’s exit preparations would be delayed until the end of the agreed Implementation Period. Market access arrangements would continue and the UK would remain part of the joint supervisory framework, with ESA functions continuing to apply to the UK, until the end of the Implementation Period.

In any exit scenario, we expect UK regulators to continue to work closely with their counterparts in the EU. This is demonstrated in the Political Declaration agreed between the UK and the EU on the future relationship, in which both sides commit to close cooperation on supervisory and regulatory matters.