In a keynote speech at the BIBA 2018 Annual Conference & Exhibition in Manchester today Mr Bailey said solid preparation for the UK’s exit from the EU was of utmost importance to avoid “cliff-edge risks.”
He told the conference: “We are working on the basis that the UK’s exit from the EU will take place in March next year.
“After this, we expect a transition or implementation period to take effect, which we strongly welcome.
“We think that having such a period is in the interest of all parties in this process, for two reasons.
“First, because we need a period of time in which there is clarity and stability about the relationship between the UK and the EU so that we can put in place remedies for the risks that could arise from a sudden change in that relationship, which we tend to call the cliff-edge risks.
“And second, it is surely better to have a period when we need to prepare for that future relationship knowing what it will be.”
Turning to the “cliff-edge” issues, he said: “These arise in large part if there is a sudden and disorderly falling away of the passporting system without having an effective plan to bridge to the future.
“The passporting system goes both ways, from the UK to the EU, and from the EU to the UK, so both sides have a strong interest in orderly transition.”
On passporting he revealed that “as of this April, 5,910 financial services firms were passporting out of the UK under EU Directives, and 8,629 firms were passporting in.”
Turning away from Brexit, he also laid out some of the themes of the FC’s Business Plan for 2018-19.
He listed the FCA’s seven cross-sector priorities as:
• Firms’ culture and governance
• High-cost credit
• Tackling financial crime
• Data security, resilience and outsourcing
• Innovation, Big Data, technology and competition
• The treatment of existing customers
• Long-term savings, pensions and intergenerational differences
He said: “These priorities illustrate well the size of the landscape under the FCA’s remit and the scale of the challenges we face, but also why it is, for us at least, such an exciting plan to take forward.”
The wide-ranging speech also touched on the subject of data, which while being under the auspices of the Information Commissioner, was still an area of keen interest for the FCA.
He said: “GDPR places more emphasis than before on those processing personal data being accountable for and transparent about the lawful basis for that processing.”
Mr Bailey warned that the regulator would not hesitate to crackdown on data abuses.
He said: “Our role in protecting consumers and in the integrity of markets inevitably means that we are focused on the use and misuse of personal data.”