UK's financial services minister warns regulators over competitiveness remit

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By Huw Jones

LONDON (Reuters) -Britain will do more to make regulators take the financial sector's needs into account if they don't apply their new competitiveness remit, UK financial services minister Bim Afolami said on Wednesday.

There will be an update from regulators on how they are applying their new remit in coming months, Afolami said.

"Be assured, we will go further if needed, if things are not developing in the way that we would all like to see," Afolami told an event at UK Finance, the banking industry body.

Afolami and his boss, finance minister Jeremy Hunt, have already clashed with the Financial Conduct Authority's 'naming and shaming' plans to publish the names of companies they are investigating early on, rather than after a probe has been completed.

Hunt has said the plans, which have triggered a major backlash in the financial sector, appear to clash with the FCA's remit to boost competitiveness.

The FCA says it was surprised by the backlash and that it will consider a "public interest" test in coming months that could be applied before any company is named.

Afolami said the financial sector does not feel that the regulators' "mindset" - seen by many as too risk-averse - has shifted enough but that they would be given time to show they are moving in the right direction.


Britain's departure from the European Union, leaving the financial sector largely cut off from the continent, prompted a wide-ranging review to see how UK financial rules could be reformed to bolster London's competitiveness as a global financial centre.

Afolami said the UK financial sector must continually adapt to maintain its global "uniqueness", adding that Britain would diverge from EU rules when necessary to do this.

The UK finance ministry and regulators have begun rolling out the "Edinburgh Reforms" and the "Mansion House Compact" to ease listing rules and get pension funds committed to putting some cash into unlisted growth companies, to help London compete better with New York, Singapore and EU financial centres.

He said he would not mandate pension funds to do this.

Reversing the halving of retail investor participation in capital markets over the past 15 years is also needed, he said.

Companies meeting him were "desperately keen" to list in London, as it battles competition from New York and elsewhere.

"We've really sort of turned a corner," Afolami said.

(Reporting by Huw Jones, writing by Sachin Ravikumar, editing by William James and Gareth Jones)