2021-04-26 15:14:55


EBC Financial Group(UK)的现任首席执行官David Barrett曾在美国AIGNat 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。


以下David Barrett分享了在英国脱欧背景下英国监管的趋势,更严格和更高要求的监管体系对整个行业将产生深远而长久的影响。


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 UK’s 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 Clients


Brexit:  The reality is that the outcome and its effects on the market are still unclear. The UK left the EU on 31st Jan’20, it entered a transition Period that should have ended 31 Dec’20, but on 24 Dec’20 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 31st Dec,’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.

很多公司表明了英国主体将不会再服务欧洲经济区客户。一些更大规模的公司则在欧洲经济区成立新公司,且服务当地的客户), 而其他的则会在欧洲经济区成立新公司来留住客户.

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 Italy’s 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.



若想了解更多英国监管最新动向,欢迎在评论区提出你的问题, 笔者将在下一期作答。












Future restrictions for FCA Firms:  Clearly the ESMA leverage rules are firmly in place now and we do not see many changes in the near term to the levels implemented. Indeed, we would argue that as the UK feels its way into a post Brexit world it may take the chance to differentiate itself on the global stage and raise these limits a tad from the levels we see now. We do not think they will go back to the previous ‘as you like’ environment but for given client types some more leverage maybe allowed at some point. The number of Clients that are moving to offshore and poorly regulated locations is a bad side effect of placing such harsh limits on all Retail Clients here, exporting the problem is not solving it.




Probably the most intriguing area for future regulation will be Crypto. Early steps from the FCA have seen them ban the most easily accessible (and sellable) product - CFD’s. We are sure the argument will go on for a long while yet but at some point, the global regulators are going to have to take a more joined up view.


If you are a believer or not as an asset class Crypto has some very appealing attributes for all parts of the industry, Brokers filling a demand from Retail Clients is just a part of it. Recent moves are attributed to institutional participation and this could be the best hope believers have of the regulator being forced to work out a more joined-up approach. The institutional interest comes for two main reasons – the higher the price goes (and the less corelation it has to other assets) the more managers want to put it into the portfolio mix. BAFIN recently approved an ETF that is cleared via Xetra in Germany and the CFTC has been allowing Crypto derivatives for about 3 years in the US so a leading regulator like the FCA will find it hard to ignore the appeals for participation for ever we feel. If this becomes another case of regulation that drives Retail Clients offshore, then the argument about the effective protection given to them will continue.



The other sector is risk taking by the institutions. Most of them care less about the underlying asset and more about the volatility, correlations, and pricing opportunities that a fast-moving price brings. Goldman recently announce a second move into trading and structuring in Crypto products and where they go others will follow – all looking for regulatory advice along the way


As an industry the continuing undertone of bad actors, money laundering and illicit financing using Crypto needs to be addressed. Regulators all over the world have used these problems as an effective stick to stop the market maturing in a way some users would like.



In the end, agree or not the belief in the product is real and growing, for now. A price drop, like the previous ones seen, would certainly do much damage to Crypto as an asset class as we have seen before but now, we have institutional recognition of its potential regulators will, we feel, be forced to act.



Lastly some brief comments on Firm ownership:  The majority of the global growth in brokerage business in the last decade has been driven by Asia. The US market is exceedingly difficult to break into due to large balance sheet requirements and regulatory oversight. Europe is a very mature market now and finding new clients is proving difficult in a very saturated environment. Asia has proved to be fertile ground for many but clearly has its own, local regulatory issues.



In the past Asia had been plagued by trading and investment scams, as the end Clients become more educated, they are looking for more legitimate Firms to deal with and many local operators have looked to set up FCA regulated firms to add credibility to their offering. The FCA took a while to get a grip of this but is now very much on the front foot when looking at new owners, products, and the client base mix of Firms that it regulates.


Anyone looking to open a company that will need to be regulated in the UK will face an extremely strict process. The Ultimate Beneficial Owner (UBO) will need to have a solid background in the industry, a robust business plan and clear reasons for wanting to open a UK based Firm. The source of wealth is a major concern to the FCA as well, previous applicants that have been a cover for illegitimate funding are excluded early in the process, the FCA now use local contacts and intelligence to investigate information given in applications.


They will not allow firms to open to simply provide a platform for Asian clients. As discussed above capital requirements and financial robustness of the Firm have risen (and will continue to do so) and they will insist on local officers to have total day to day control of the Firms activities. Previous applicants have used good local candidates for the applications and upon registration removed and replaced them with less qualified officers – the FCA will revoke registration now if they see this.


The point to take away from this is that a Firm, regulated by the FCA now, has no choice but to have an owner and officers of the highest standard, it must have the financial resources needed to operate a Firm correctly and it will receive a huge amount of regular scrutiny from the FCA to make sure it continues to comply with the rules. Being regulated in the UK is not an easy thing to attain, not an easy thing to keep and not an easy thing abuse.



若想了解更多英国监管最新动向,欢迎在评论区提出你的问题, 笔者将在下一期作答。


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