PRA's Bold Reform Proposal Aims to Boost UK's Financial Competitiveness

The Prudential Regulation Authority (PRA) in the UK proposes reforms to enhance the safety and competitiveness of trading and clearing activities. The proposals focus on conditions for recognizing overseas exchanges and encourage firms to conduct liquidity risk assessments. Feedback is invited for these regulatory changes.

The UK's Prudential Regulation Authority (PRA) unveiled proposals on Wednesday aimed at reforming rules for recognized exchanges, focusing on maintaining the safety and soundness of trading and clearing activities.

Central to these proposals is the process for defining an overseas exchange as a recognized exchange in Britain. This move is part of a larger strategy to bolster the international competitiveness of Britain's financial sector by aligning certain rules with global standards and expanding asset eligibility.

Additionally, the PRA suggests that firms should conduct their own liquidity risk assessments for exchanges and assets. These would be reviewed by the regulator through post-implementation thematic evaluations. Stakeholders, especially those using non-UK exchange assets, are encouraged to provide feedback on these proposals.

(With inputs from agencies.)