LONDON, March 2 Exploiting loopholes in European
Union rules could bar Britain from accessing the bloc's
securities markets after Brexit, a senior member of the European
Parliament said on Thursday.
New EU rules to increase transparency in securities markets
come into force in January 2018, just over a year before Britain
is set to leave the bloc.
Kay Swinburne, a centre right British MEP, told an audience
of financial industry officials not to exploit loopholes in
these new rules after Brexit otherwise Britain's ability to
access the EU market under so-called "equivalence" terms would
Financial services firms in countries outside the EU can
currently sell products to European investors as long as their
home rules are deemed as strict as those in the bloc.
Swinburne said the process for Brussels to decide if a
country's rules are "equivalent" should be straightforward, but
politics was also going to play its part.
She said the EU took four years to deem one U.S. derivatives
market rule equivalent, and British firms would have to abide by
the spirit and not just the letter of the EU rules.
"If the UK is seen not to be doing the right thing, there
will be a backlash," Swinburne told a FIX Trading conference.
She said EU regulators needed to clarify an element of the
new securities rules, known as MifID II, that covers "systematic
internalisers" or SIs, which refers to banks matching sell and
buy orders for shares inhouse.
The EU regulators are being asked to confirm that linking
SIs - which effectively creates a wider, less regulated off
exchange market - should not be not allowed under MiFID II,
(Reporting by Huw Jones. Editing by Jane Merriman)