UPDATE 1-French markets watchdog wants tougher rules for UK firms after Brexit


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LONDON (Reuters) – The European Union system for granting financial market access to foreign firms must be toughened up given that a dominant financial centre will become a close neighbour after Brexit, the head of France’s markets watchdog said on Thursday.

FILE PHOTO – General view of the headquarters of the AMF (Autorite des Marches Financiers), France’s stock market regulatory organisation, in Paris, January 29, 2008. REUTERS/Benoit Tessier

Robert Orphele, chairman of the Autorite des Marches Financiers (AMF), said EU market access rules for non-EU or “third countries” should be revamped before the bloc’s financial market is opened up to Britain, which is quitting the EU next March.

“When the main financial centre of the EU is about to leave the Union, it is clear that the European third country regimes as previously defined can no longer be appropriate and hence deserve to be revisited,” Orphele told a meeting of the OMFIF think tank.

Currently, foreign firms can serve EU customers if their home rules are “equivalent” or as strict as the bloc’s. This allows EU regulators to “defer” to a firm’s home supervisor, meaning not every EU rule has to be complied with.

He singled out the EU’s sweeping MiFID II securities rules that were introduced in January, saying they should be more comprehensively applied to foreign firms to ensure consumer protection and financial stability.

“In my opinion, this can only be ensured by mandating that a subset of MiFID II… on transaction reporting, transparency, mandatory trading of shares and derivatives on platforms, is applied to third country firms operating in the EU,” Orphele said.

This is not extra-territoriality or regulatory overreach, he said. “This is ensuring a proper level playing field in Europe, when European clients are involved.”

Orphele said the EU should grant “transitory” equivalence to market infrastructure – such as for trading and clearing securities – to allow the bloc to make the changes to its equivalence regime as he set out in his speech.

Reporting by Huw Jones; Editing by Mark Heinrich


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