LONDON (Reuters) -Britain’s Financial Conduct Authority is seeking to streamline rules on the funds investment firms must hold to absorb losses and maintain resilience in distressed markets, with proposed changes it said could cut red tape by as much as 70%.
The watchdog, which is currently revamping regulation of Britain’s financial industry to boost its growth and competitiveness, said the proposals to simplify rules in the EU-derived Markets in Financial Instruments Directive (MiFID) would cut the time and resources investment firms spend interpreting and applying the requirements.
It said there would be no change to the mandates around the amount of capital firms must hold.
Some of the rules were designed for banks, the FCA said, making them too complex and only partially relevant to the vast majority of investment firms.
“We want the revised framework to be proportionate, effective, and aligned with the needs of investment firms while maintaining high standards of financial resilience and consumer protection,” Simon Walls, interim executive director of markets, said in a statement.
Tom Callaby, a financial services partner with law firm CMS, said he welcomed the FCA proposals but further work was needed to simplify rules for less risky firms that were not subject to the existing MiFID framework.
(Reporting by Pushkala Aripaka in Bengaluru and Sinead Cruise in London; Editing by Eileen Soreng and Kate Mayberry)
