The Financial Conduct Authority (FCA) and the Bank of England, including the Prudential Regulation Authority (PRA), have agreed a Memorandum of Understanding (MoU) that sets out how they co-operate with one another in relation to the supervision of markets and market infrastructure, which includes financial market infrastructures (FMIs).
This reflects the FCA’s and the PRA’s responsibilities for the supervision of participants of FMIs supervised by the Bank as well as the FCA’s responsibilities for trading venues that rely on, or are connected with, FMIs. The Financial Services Act 2012 introduced an obligation to review this MoU annually. The FCA and Bank committed that this review would include feedback from industry and the findings would be published.
The FCA and the Bank conducted the first such review in early 2014, following the commencement of the new regulatory responsibilities in April 2013.
The Chief Executive Officer of the FCA and the Deputy Governor Financial Stability at the Bank considered the views of industry and staff, concluding that the MoU’s arrangements for co-operation over the first 11 months of the authorities’ new responsibilities, have worked well, and in a coordinated manner with no material duplication. They noted that as staff who had previously worked together under the aegis of the Financial Services Authority (FSA) moved into different roles, it was important to retain strong working level relationships.
The FCA and Bank continue to refine their cooperative working arrangements and welcome the suggestions from industry for some areas for consideration.
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