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Financial Conduct Authority's (FCA) International Expansion: A Post-Brexit Adjustment
The Financial Conduct Authority (FCA), the UK's financial markets regulator, is making a bold move. For the first time, it's planning to establish overseas outposts, but why? Let's dive into the reasons.
Rory Doyle
April 23, 2025
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The FCA's international expansion is a strategic response to Brexit's impact on UK-EU trade relations. Here's the lowdown:
Economic Strategy Shift
Before Brexit, the EU accounted for 42% of UK exports and 52% of imports[^4^]. With reduced direct access to EU markets, the FCA is looking to forge relationships with non-EU jurisdictions to offset potential trade gaps and keep pace with global regulatory shifts like T+1 settlement harmonization[^6^].
Global Regulatory Cooperation
The FCA's overseas presence, such as in Washington DC and Australia, is aimed at enhancing cooperation with international regulators[^6^]. This move ensures UK firms remain competitive as major jurisdictions, like the EU, transition to T+1 settlement by 2027. This initiative aligns with efforts to maintain the UK's status as a global financial hub amid post-Brexit investment uncertainties[^5^].
Trade and Investment Priorities
To reduce barriers for UK financial services exports and facilitate cross-border market access, the FCA is positioning regulators abroad[^1][^5^]. This move addresses Brexit-related challenges such as the fragmentation of EU-UK regulatory frameworks.
[^1^]: Legal firms like A&O Shearman note that the FCA's overseas missions aim to "support the export of UK financial services internationally and attract inward investment."[^4^]: Pre-Brexit, the EU dominated UK trade, necessitating diversification.[^5^]: Research underscores Brexit's investment risks, demanding proactive regulatory outreach to sustain investment.[^6^]: The ECB's T+1 opinion highlights global settlement alignment, where the FCA's overseas presence aids coordination.
- The Financial Conduct Authority (FCA) is looking to establish overseas outposts as a strategic response to Brexit's impact on UK-EU trade relations, aiming to forge relationships with non-EU jurisdictions and offset potential trade gaps.
- The FCA's overseas presence, such as in Washington DC and Australia, is aimed at enhancing cooperation with international regulators, ensuring UK firms remain competitive as major jurisdictions transition to T+1 settlement by 2027.
- To reduce barriers for UK financial services exports and facilitate cross-border market access, the FCA is positioning regulators abroad, addressing Brexit-related challenges such as the fragmentation of EU-UK regulatory frameworks.
- The FCA's international expansion is aligned with efforts to maintain the UK's status as a global financial hub, while also addressing the investment risks associated with Brexit, necessitating proactive regulatory outreach to sustain investment.
