* IRSG says not seeking a "race to the bottom" in rules
* Britain should avoid "gold plating" of rules
* Call for new parliamentary committee for financial rules
By Huw Jones
LONDON, Jan 23 (Reuters) - Britain's regulators should have
a formal role after Brexit to keep the financial sector globally
competitive and less prone to "gold-plating" international
norms, an industry think tank said on Thursday.
The International Regulatory Strategy Group (IRSG) said new
thinking and targeted reforms were required after Britain leaves
the European Union on Jan. 31. UK regulators will write its own
financial rules instead of applying those fashioned by Brussels.
"Brexit does change the structure around regulation and we
need to reflect that," Mark Hoban, chair of the IRSG and a
former UK financial services minister, told Reuters.
The Financial Conduct Authority (FCA) and the Bank of
England are responsible for keeping markets and financial firms
safe and stable.
But in a report on regulation after Brexit, the IRSG called
for a secondary remit of ensuring that rules do not put the
financial sector at a competitive disadvantage to New York,
Frankfurt or other rival centres.
British regulators have resisted such calls, fearing it
would increase pressure to ease rules.
Their predecessors had to "have regard" to Britain's global
financial role and were tarnished by a "light-touch" reputation
after the financial crisis a decade ago.
"The use of the word competitiveness is often quite loaded,"
said Julian Adams, regulatory and government relations director
at insurer M&G, and chair of the IRSG report.
"This is not code for a race to the bottom," said Adams,
also a former senior insurance regulator at the Bank of England.
The IRSG is sponsored by the City of London financial
district and TheCityUK, which promotes Britain as a financial
centre.
Britain will remain a member of international financial
standard setters after Brexit, whose norms typically form the
basis for national or EU laws that Britain has often
"gold-plated" - or toughened up.
The report calls for Britain to formally take into account
international norms when writing rules to avoid exceeding them
unnecessarily in a way that would harm UK competitiveness.
"You make sure the global standard is as good as you want it
to be and need it to be as a regulator, and then you would try
and limit to the extent possible any gold-plating," Adams said.
UK rulemaking in isolation could also have implications for
access to EU investors after Brexit, said Lucy Fergusson, lead
author of the IRSG report and a lawyer at Linklaters.
The report called for a new parliamentary committee to
directly focus on financial rules.
The competitiveness call is likely to get a sympathetic
hearing from government, mindful that finance is Britain's
biggest tax-raising sector which may not secure good future
access to the EU, its biggest export customer.
(Reporting by Huw Jones
Editing by Mark Heinrich)
