Financial Conduct Authority forms Brexit alliance with Dutch regulator

Several major institutions have opted to establish Dutch entities as the UK prepares to leave the European Union.  

Regulatory authorities in the UK and the Netherlands have agreed to formalise a partnership, as several key institutions prepare to operate in both countries in the aftermath of Brexit.

The Financial Conduct Authority (FCA) and the Dutch Authority for the Financial Markets (AFM) signed a joint agreement during a meeting earlier this week in London, to ensure effective oversight of firms that have been granted licenses to operate in the Netherlands.

It will apply in both a deal or no-deal scenario, and builds on the relationship that both regulatory authorities have in other areas of the industry including FinTech, data-led supervision and market abuse.

“We have always had a strong relationship with the Dutch AFM and this agreement strengthens that relationship,” said Andrew Bailey, chief executive of the FCA. “Given the increasing interconnectedness of financial services markets, having close relationships with other countries’ regulators helps to ensure that we can protect consumers and maintain our oversight of firms and markets.”

Since the UK’s referendum on its departure from the European Union in June 2016, major financial services institutions have opted to establish European bases in Amsterdam in order to continue serving its clients and providing liquidity in the region after Brexit. Firms granted approval to operate in the city include Cboe Europe, CME Group, Tradeweb, MarketAxess, the London Stock Exchange Group’s Turquoise, Bloomberg and others.

“We are looking forward to working together in this partnership,” added Merel van Vroonhoven chair of the Dutch AFM. “We see UK financial institutions moving to the Netherlands, especially international regulated markets, other trading platforms and traders. Their choice for the Netherlands will impact our capital markets and trading infrastructure. The closer cooperation with the FCA will put us in a better position to protect investors and capital markets through the sharing of information and expertise to minimise risks.”