The Financial Conduct Authority (FCA) has stated it is in very close contact with the firms it supervises as well as the Treasury, the Bank of England and other UK authorities, and is currently monitoring developments in the financial markets.

The FCA said: ’Much financial regulation currently applicable in the UK derives from EU legislation. This regulation will remain applicable until any changes are made, which will be a matter for government and parliament.

‘Firms must continue to abide by their obligations under UK law, including those derived from EU law and continue with implementation plans for legislation that is still to come into effect.

‘Consumers’ rights and protections, including any derived from EU legislation, are unaffected by the result of the referendum and will remain unchanged unless and until the government changes the applicable legislation.’

The FCA says that the longer term impacts of the decision to leave the EU on the overall regulatory framework for the UK will depend, in part, on the relationship that the UK seeks with the EU in the future.

During the referendum campaign, the Leave advocates indicated that this could take a number of forms. The UK could, potentially, decide to join the European Free Trade Association (EFTA), or remain a member of the European Economic Area (EEA), or negotiate bilateral agreements with the EU to create a new and unique UK-EU relationship.

In its statement on the impact of Brexit, the Financial Reporting Council (FRC) said: ‘Stakeholders have asked about the implications of the referendum result for our regulatory work. Our regulatory framework is unchanged and we will continue to apply it. The FRC will also continue to play its part in representing the interests of the UK internationally.

‘We will pay close attention to the decisions now taken by the government and Parliament, and continue to work in collaboration with our key stakeholders, particularly investors, business and the professionals we regulate, in order to ensure our work continues to support economic growth.’

Early reactions to the Leave vote had a negative impact on both the stock exchange and sterling. Speaking immediately after Prime Minister David Cameron’s resignation speech, Mark Carney, the governor of the Bank of England, said that ‘inevitably, there will be a period of uncertainty and adjustment following this result’. 

However, Carney said UK banks have raised over £130bn of capital, and now have more than £600bn of high quality liquid assets, leaving them prepared to cope with the current financial turmoil.
‘Moreover, as a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities.  The Bank of England is also able to provide substantial liquidity in foreign currency, if required.

‘We expect institutions to draw on this funding if and when appropriate, just as we expect them to draw on their own resources as needed in order to provide credit, to support markets and to supply other financial services to the real economy. In the coming weeks, the Bank will assess economic conditions and will consider any additional policy responses,’ Carney said.

Cameron has made clear that Article 50 of the EU Treaty, which activates the process for the UK to leave the EU, will not be triggered until the early autumn once his successor has been appointed.
ICAEW CEO Michael Izza said it was important for both sides that the negotiations over the ending of the UK’s membership were approached ‘in the spirit of an amicable separation’.

‘The negotiation process has the potential to create instability for businesses and the profession as we seek to understand what the new economic and legislative landscape will look like for the UK.  

‘There will be lots of questions over the coming weeks and months and I see ICAEW’s role as being there to help explain what’s going on, to provide support and guidance for our members, their businesses and their clients as we get greater clarity on the implications of leaving the EU,’ he said.

For her part, ACCA chief executive Helen Brand said: ‘As with any period of change and uncertainty, professional accountants will play a critical and strategic role in bringing much needed stability to business and society. As always, we are ready to support our members and students as they carry out this vital function going forward.

'Over the coming weeks and months will see changes to the UK’s relationship with Europe, and indeed the rest of the world. We are committed to ensuring our members and students are up to date on all the key developments as they occur.'