Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), was due to warn London’s Lord Mayor that MiFID II was ruining the quality of sandwiches served at lunches in London’s financial centre.
In a draft City Banquet speech released before the event on Thursday night (25th), Bailey appeared to link the “critical decline” in City sandwich quality to inducements under MiFID II, the updated Markets in Financial Instruments Directive.
He was due to say: “It’s hazardous for the FCA to give guidance, but here goes. If you are offered a sandwich and are assured that it has no value for MiFID II purposes, I would probably not eat it.”
Brussels has angered Britain for meddling in food before. There were previous attempts by Eurocrats to straighten bananas and cucumbers.
However, the flaw in any claim from the UK that the EU has been detrimental yet again to perishable goods is that the FCA is widely known to have played an instrumental role in writing MiFID II and has implemented the regulation in full, unlike certain other EU countries.
Bailey made it clear that the complaint about MiFID II and sandwiches was received from other parties. It was not suggested he shared these feelings.
The complaint came in the obviously humorous opening paragraphs of a speech due to be delivered at the banquet event.
“On a more serious note”, the FCA chief was also planning to talk about Brexit.
“We are preparing for a range of outcomes including an implementation period that smooths transition and a hard and sudden exit. It’s a lot of work, but I think we are on course, thanks in very large part to the huge input from FCA colleagues.”
Bailey was due to say that the UK urgently needs the engagement of EU counterparts to put in place Memorandums of Understanding and other important practical arrangements.
“This is not just a self-serving UK point. It applies to both sides. MoUs will support cross-border supervision of firms and data sharing will support our ability to jointly oversee markets.”
The FCA is a significant sharer of cross-border data, passing on around 70% of transaction reports to counterparts across the EU.
The draft speech also said that a broad solution to “removing cliff edges” is for both the UK and EU to commit to taking reciprocal equivalence decisions on each other’s regimes, as early as possible.
“Our work to onshore the EU rulebook, as outlined in our consultation, demonstrates that on day one, the UK will have the most equivalent framework to the EU of any country in the world,” Bailey was due to say.
Steven Maijoor, the chairman of the European Securities and Markets Authority, and other counterparts in national authorities in the EU were continuing the “very constructive engagement”.
Bailey’s draft speaks about the UK as a ‘third country’.
“My own view is that the principle of pro-actively recognising equivalence makes a great deal of sense, and is consistent with the arguments put forward by the EU in the context of Brexit in terms of not constraining domestic choices.
“So, it ought to have broad support, except probably amongst those who take a more mercantilist view and are prepared to sacrifice the principle of open markets, with which as you can see I strongly disagree.”
There was one more flash of humour before the planned speech at Mansion House was over.
“I was amused the other day when someone asked in Parliament if the FCA had adequate resources to deal with this [Brexit scenarios]. It was the same day that we put out 900 pages of consultation documents on Brexit preparations for no deal, which is good going in a single day even by our standards.”
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