Mark Turner, Managing Director and Jane Stoakes, Director in the Compliance and Regulatory Consulting practice at Duff & Phelps, spoke to Thomson Reuters about the Senior Managers and Certification Regime, and what it means for certain parts of the financial services industry such as credit rating agencies, central clearing counterparties and trade repositories, especially in light of Brexit.
"The credit-rating agencies, trade repositories and CCPs are currently registered with and regulated by [the European Securities and Markets Authority (ESMA)]. As a result of Brexit, HM Treasury has said the EU directives to which these entities are subject will be written into UK law. Trade repositories, rating agencies and CCPs registrations will be grandfathered across to the UK regulators. There hasn't been any talk of SMR being imposed on these entities. It may well come later," said Jane.
Mark adds; "Credit-rating agencies, CCPs and trade repositories are obviously fundamentally important to the financial services infrastructure, but perhaps regulators have taken the view at the moment that there isn't a direct impact on clients and customers. The prudential risks these firms are taking are different from a bank or an insurer. It's hard to argue against why you wouldn't want to apply the principles of personal accountability across financial services infrastructure companies and the rest of the UK corporate sector more broadly.”
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