KPMG believes the Fair and Effective Markets Review creates an environment which boosts the UK’s reputation as a leading centre for global capital markets.
Responding to the Fair and Effective Markets Review (FEMR), announced today at the Mansion House dinner, Bill Michael, head of financial services, Europe, Middle East and Africa at KPMG, said: “The Fair and Effective Markets Review creates an environment which boosts the UK’s reputation as a leading centre for global capital markets. The next step is to strive for global consistency and put FEMR on the global agenda.
“This is a big leap that moves the debate from the wholesale scandals towards actions that will restore trust in our financial services industry.
“Currency hedging, commodity price and debt management are important factors that underpin global trade and the real economy. The market needs transparency and the proposed FICC Market Standards Board supports this.
“It is clear from this review that there is not one answer. The Bank of England and the Government has shown leadership in inviting people to put their best foot forward through the Open Forum. This is good policy making. “This creates an environment that fosters change, rather than imposing detailed new rules where unintended consequences can sometimes occur. We believe this is a pragmatic approach that will benefit the real economy.
“The onus now is on market participants to take this opportunity and shape the position of the UK as a leader in global capital markets.”
KPMG believes that the industry and regulators should use FEMR as a stepping stone to establish global standards. In particular, in Europe to support the European Commission’s Capital Markets Union, which was designed to bring some of the vibrancy of the US capital markets to Europe.
Giles Williams, regulatory partner at KPMG, said: “The industry and regulators must promote FEMR in other markets. If the Financial Stability Board takes similar proposals to the G20, it will help kick-start the global agenda debate.
“Similarly, this could be a significant contributor to the European Commission’s ‘jobs and growth’ agenda via the Capital Markets Union.
“There is still much to be done to reduce the high-level dependency on bank lending, create more of an entrepreneurial investment culture, unblock savings and savers, build the right infrastructure and drive business engagement across Europe. FEMR will contribute towards this.”
Finally, KPMG welcomed the recommendation to consult on legislation to extend elements of the Senior Managers and Certification Regime to a wider range of regulated firms, including asset managers and interdealer brokers.
Williams concluded, “If we are to secure the UK as a financial centre, the Senior Managers’ Regime must be implemented effectively, proportionately and more importantly, consistently across our financial sectors.”
“The financial crisis has taught us that we have a chronic need for clear and appropriate responsibilities that recognises all employees, not just senior people, have an obligation to a broader set of stakeholders.”
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Simon Chan, PR Assistant Manager, KPMG
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.