The Bank of England and the Financial Conduct Authority will continue to work closely together, the bodies said, particularly when it comes to overseeing financial market infrastructure (FMI).
In a joint statement the pair said their Memorandum of Understanding (MoU) has proved effective in reducing duplicate regulatory oversight and will be reviewed annually. Feedback from FMIs suggested that the current state of play is “working effectively”.
The Bank and FCA held a consultation with FMIs: Central Counterparties (CCPs), Recognised Investment Exchanges (RIEs) and Recognised Central Securities Depositories (RCSDs) based on these firms’ interaction in 2023.
The firms acknowledged the coordinated efforts and agreed that the Bank and FCA remain committed to effective co-operation. Respondents also highlighted increased communication and coordination between the respective supervisory teams relating to topics such as operational resilience.
The MoU will be updated in 2024 to reflect changes related to the Financial Services Markets Act (2023), as well as new areas requiring coordination, including regulatory sandboxes, in which innovations can be safely tested, and policy initiatives.
The Bank and FCA are also agreeing a separate MoU setting out how they intend to cooperate with each other in relation to the operation and supervision of the Digital Securities Sandbox (DSS). This DSS MoU will be published before supervision in the DSS commences.
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