LONDON (Reuters) - Britain set out a roadmap for post-Brexit financial regulation on Wednesday, saying it wanted to improve regulatory standards and would increase the maximum prison sentence for market abuse to 10 years from seven years.
Britain has said the rules that govern the world’s largest international financial hub are likely to diverge from those in the European Union, due to the scale and complexity of financial flows through London.
“Now the UK has left the EU, we must ensure we have a regulatory regime that works for the UK and allows us to seize new opportunities in the global economy,” junior finance minister John Glen said.
The Bank of England, which oversees much of the financial sector, has said it does not want to see lower regulatory standards after Brexit but that it would be wrong to continue to follow EU rules over which Britain no longer has any say.
The government is proposing new legislation that would implement remaining Basel III bank capital standards, bring “more proportionate” regulation of investment firms and give the Financial Conduct Authority greater powers to ensure the wind down of the scandal-hit LIBOR interest rate benchmark.
However the transition period to stop using some third-country financial benchmarks would be extended until 2025 from 2022 to allow more time for a replacement.
Proposals first made five years ago to increase the criminal penalty for financial market abuse will also be implemented.
Other steps include making it easier to market foreign investment funds and money market funds to British consumers, and for financial firms to move between different clearing houses.
Reporting by David Milliken; editing by William James and Stephen Addison
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