EBC Financial Group(UK)的现任首席执行官David Barrett曾在美国AIG、Nat West Bank现苏格兰皇家银行，里昂证券，荷兰银行，野村证券等国际金融集团任职超35年。熟悉各种金融产品，擅长于金融服务商业战略咨询，金融产品架构等。曾任AIG金融产品执行董事，负责与国际一级银行，大型对冲基金、家族办公室等合作。
Here in the UK the regulator is split into two main areas. We have the Prudential Regulation Authority (PRA) who regulate around 1,500 Banks, Building Societies, Credit Unions, Insurers, and the main Investment Firms. Alongside the PRA we have the Financial Conduct Authority (FCA), it regulates the bulk of the remaining Financial Services Industry in the UK and is the body that Brokerage businesses interact with in the UK. Its main tasks are to ensure that the industry remains stable, enables healthy competition and probably most importantly it has a major role in protecting Consumers and Clients of the firms it overseas.
The UKs FCA has long been seen as the benchmark for global regulation for Institutions and Clients alike, so changes that it makes to its oversight matter not only to companies that it regulates but also to the market in general. The last decade has seen many changes in how it operates and how companies that wish to be active in the UK must operate as well. Below we look at a few areas of interest to UK and overseas Brokers and Client
Brexit: The reality is that the outcome and its effects on the market are still unclear. The UK left the EU on 31stJan‘20, it entered a transition Period that should have ended 31 Dec’20, but on 24 Dec20 the UK and the EU agreed a Trade and Cooperation Agreement - but what does this mean for Companies and Clients operating in the UK and EEA？
For Brokers, the main issue they have faced is the end of passporting their authorisations from the UK to the EEA or vis versa. As of 31stDec,20 all passporting was ended, in theory Firms needed to stop operating in other countries that they had been passporting into or they had to get local authorisation to be active there. The UK government agreed to allow EEA authorised firms to carry on operating in the UK under the scope of their local permissions (using a Temporary Permission Regime), unfortunately the EU did not do the same. This has led many high-profile brokers based in the UK to make changes to their business model.
Firms simply said that its UK entity will no longer service EEA clients and they have not been alone. Larger Firms can establish EEA based Firms and direct the Clients there , others have set up new Firms within the EEA , to retain Clients.
It should be mentioned that some jurisdictions have become quite aggressive in the monitoring of who is marketing to which clients and from where – Germany and Italys regulators have been actively doing this.
While the EEA, via ESMA have been instrumental in limiting Brokerage offerings to Retail Clients and will probably be happy to keep things as they are we suspect that the UK will want to, or even be forced to, take a more expansive approach. CySEC recently extended the deadline date for Firms to apply for Temporary Permission there, a further sign that they are happy to accommodate. The UK Government has already said that it sees the Financial Industries recovery as a main stay of future economic strength – it contributes approx. £130 billion to the UK economy and well over 1 million jobs and not just in London. In Edinburgh around 10% of all jobs are in the financial sector.
We believe that over time they will use the UK and FCA brand to attract Firms on a more favourable basis to be able to interact with the rest of the world and that the EU may well find itself too inward looking and becoming less attractive on the global stage.
Future capital requirement changes for FCA Firms: One of the biggest changes that have been announced (but not yet implemented) will be the Change in minimum capital thresholds, consolidating the assessment, concentration risk and the ending of the Matched Principal exemption. All these changes are being driven by the EEA but despite Brexit the UK has agreed to go along with them, it could be argued that it makes any future passporting talks easier. As an overview the proposed changes mean that all EEA and UK firms will be looked at and classified in the same way, rather than the multi-level approach used in the UK now.
Adding to the capital burden for UK Firms will be consolidated assessment, that is any UK Firm that has EEA subsidiaries will have to report the above by including these Firms requirements along with the UK Firms in its numbers. Add this to a soft limit of 25% of the value of own funds used to support exposures and you can see the balance sheet burden growing.
Perhaps the biggest change will be for Matched Principal Brokers – under current FCA rules these Firms get a reduction of the capital needed for acting as a Principal to trades, STP brokers are only required to have Euro125k instead of Euro 730k. This will change, the EEA do not understand the concept of Matched Principal Brokers and do not agree with the capital discount. All these brokers will need to have this part of the calculation at Euro/GBP 750k going forward. The only good news here is that, although yet to be agreed in total it appears existing Firms will have a 5-year time frame to boost their balance sheet for this part of the equation.
Make no mistake capital requirements and robustness of a regulated Firms balance sheet is only going to go up in the future, even offshore locations like the BVI are being pressured into making changes akin to those above and locations like St Vincent and Vanuatu may have resisted thus far but any type of company registering out there now struggles to get an international bank account because of it. Regulatory pressure is everywhere.