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FCA sets aside &pound;2.5 million to deal with Brexit

The U.K.'s Financial Conduct Authority put £2.5 million ($3.1 million) aside to cover the costs associated with the U.K.'s withdrawal from the European Union, the regulator said in its 2017-'18 Business Plan and Mission Statement.

The statement, published Tuesday, provides the framework for the FCA's strategic decisions in the next year.

“We have dedicated resources to coordinate and manage this work and are liaising closely with the Treasury and the Bank of England to ensure a smooth transfer of EU rules and legislation into the domestic framework,” the mission statement said.

Andrew Bailey, CEO of the FCA, said during a news conference Tuesday that “the costs are unavoidable.”

“The FCA supports the U.K. government in the Brexit negotiation and sees the outcome for financial services based on equivalence rather than passporting rights,” Mr. Bailey said.

Separately, the FCA statement also said that during the next year it will seek feedback from the U.K. money management industry, review its policy options in relation to fund liquidity and propose a package of remedies to improve competition in the retirement income market.

In the feedback to its Asset Management Market Study, published late last year, the FCA identified a number of potential competition issues in the investment platforms market, including complex fee structures, whether investment tools enable effective choice, and whether platforms have the incentives and ability to put competitive pressure on money management fees.

Christopher Woolard, executive FCA board member and director of strategy and competition, said at the same news conference that the FCA will launch — expected in the fourth quarter — a parallel study to look into platforms based on that feedback.