BoE and FCA cooperation on FMI supervision remains effective
The Bank of England and the Financial Conduct Authority have jointly assessed their Memorandum of Understanding on financial market infrastructure supervision. The annual review, based on 2025 interactions, concluded that the cooperation remains effective.
Firms confirm effective oversight
The Bank of England and the Financial Conduct Authority operate under a Memorandum of Understanding (MoU) that defines their framework for supervising financial market infrastructure (FMI).
This MoU aims to enhance effective supervision and policy-making by facilitating information exchange between the regulators, while also promoting efficiency through the minimisation of duplicated regulatory activities.
A crucial aspect of this framework is an annual review, which assesses the ongoing effectiveness of the arrangements.
This review process actively incorporates feedback from supervised firms, including Central Counterparties (CCPs), Recognised Investment Exchanges (RIEs), and Recognised Central Securities Depositories (RCSDs).
For the 2025 review cycle, these firms expressed appreciation for the opportunity to provide insights.
They consistently reported a high degree of coordination across both policy development and supervisory matters, indicating strong industry support for the MoU.
Respondents underscored the importance of effective planning and coordination between the Bank and the FCA, affirming the value of this collaborative approach in maintaining financial stability and market integrity.
Navigating change with agile cooperation
The Bank of England and the Financial Conduct Authority confirm the continued effectiveness of their MoU arrangements, noting appropriate coordination and no material duplication.
Agile cooperation remains vital due to the challenging external environment, rapid technological change, and shared policy priorities.
The authorities have collaborated effectively on rapidly unfolding market events, supporting innovation and efficiency through initiatives such as tokenisation and the Digital Securities Sandbox.
They have also ensured effective policy development, including the UK EMIR review and the IOREP Final Policy for FMIs.
Both regulators acknowledge that efficient coordination enhances supervisory effectiveness and minimises the burden on firms, and they intend to address specific suggestions received from the industry.
A blueprint for regulatory synergy
This MoU offers a robust model for inter-agency cooperation, effectively navigating complex financial landscapes.
Its annual review, incorporating industry feedback, ensures continuous relevance and adaptability in a rapidly evolving technological and economic environment.
This sustained collaboration is crucial for maintaining stability and fostering innovation without imposing undue burdens on firms.