LONDON, June 4 (Reuters) - Rules in European Union member states for granting trading access to foreign banks need a rethink after Brexit to help prevent lenders from basing themselves in countries with laxer supervision, France’s markets watchdog said on Tuesday.
The EU has already begun tightening EU laws that set conditions for foreign firms, such as derivatives clearing houses that want to serve customers in the bloc, in readiness for Britain no longer being a member country.
But Robert Ophele, chairman of France’s markets watchdog AMF, also singled out national rules that give member states discretion over how they treat foreign firms when there is no EU law in place for a given activity, such as private placements.
“These national specificities should be reviewed,” Ophele told the annual IDX derivatives industry conference in London.
Closer cooperation among national regulators in the EU would stop “jurisdiction shopping”, or firms basing themselves in countries that enforce rules less robustly, he said.
There should also be a redesign of rules for investment funds, particularly when they are being managed from outside the bloc, Ophele said.
In a warning to London, Europe’s top asset management centre, he said a common set of rules should be defined during the review of the EU’s alternative investment funds law.
The EU’s “MiFID II” securities rules also need reconfiguring after Brexit, especially those aimed at creating a “consolidated tape” or single pipe for all share prices, Ophele said.
UK regulators have said Brexit gives Britain an opportunity to ditch the EU system of detailed rule-making, which they see as inflexible, and to focus on broad principles that can accommodate market changes more easily without diluting their robustness.
Ophele said Brexit meant the EU also had an opportunity to improve the quality of rule-making as reviews of existing laws come up.
“We should obviously be more pragmatic both in regulation and supervision,” he said. (Reporting by Huw Jones; Editing by Mark Potter)