The Bank co-operates closely with both the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) to supervise financial market infrastructure (FMI) and payment systems respectively and help ensure the stability and integrity of UK financial markets. The frameworks for co-operation with these authorities are set out in two memoranda of understanding (MoU) to support effective supervision and policy making by sharing information between the regulators and promote efficiency by minimising duplication of regulators’ activities in respect of these entities.
Signatories to the frameworks are required to review the MoUs annually to assess whether the arrangements set out in the MoU are proving effective. The authorities also seek annual feedback from supervised firms on whether the intended co-operation is working effectively as part of the review process. The Bank and FCA consulted with market infrastructures, such as Central Counterparties (CCPs) and Recognised Investment Exchanges (RIEs), and reviewed their co-operation in respect of these entities. The authorities concluded that the MoU’s arrangements for co-operation remain effective, with appropriate co-ordination and no material duplication. Industry respondents acknowledged the efforts made on co-operation particularly on LIBOR transition and operational resilience and the Bank and FCA remain committed to effective co-operation going forwards.
The Bank and FCA will continue to deepen co-operation by working together on joint reviews where possible, including conducting joint reviews on cyber security (CBEST), and will seek to complement each other’s objectives and avoid duplication of effort when information gathering. The Bank and FCA have worked together closely during the recent market volatility, including during the period of volatility resulting from the Russia/Ukraine crisis. The authorities re-affirmed their commitment to co-operate domestically and internationally to ensure sound rulemaking that reflects awareness of the others’ objectives.
