In part one of this blog we looked at some of the short-term implications of BREXIT. Now I would like to discuss some of the longer-term effects of BREXIT on the conduct and culture agenda.

Many of the conduct regulations UK firms have been implementing have come out of the European Union (EU) such as Market Abuse Regulation (MAR), Undertaking for Collective Investment in Transferable Securities (UCITS), Alternative Investment Fund Managers Directive (AIFMD), Markets in Financial Instruments Directive (MiFID) II, and Packaged Retail and Insurance-based Investment Products (PRIIPs), and firms have allocated substantial resource to implement some of these in the next few years (the MiFID II deadline is January 20181).

From a legal and regulatory perspective, nothing has changed nor will it change until the end of the two-year period triggered by the Article 50 notification.2 It may be a while before we have certainty of what the referendum really means for firms, however they are strongly encouraged to start planning how to work through what could be a long period of uncertainty and consider what the world will look like post-Brexit.

Mid to Longer-Term Considerations

  • Building Trust: In the analysis of the Brexit vote references to the financial crisis, specifically bankers being ‘out of touch’ and having had their status as a trusted pillar of society eroded,3  was cited by many as one of reasons people voted to leave. The damage done to firms’ reputations has still not been fully rectified and firms should consider how they continue to build back customer trust especially in the competitive market. The increased uncertainty provides banks, insurers and capital markets firms with an opportunity to demonstrate how they are looking after their customers’ needs and helping them manage this uncertainty.
  • Product Stress Testing: As negotiations with the EU begin, increased market volatility should be expected. Firms should make sure their product stress testing conditions incorporate the kind of scenario and thresholds that we might see in the next few years. The results of this testing should inform a plan in anticipation that the trigger actually occurs.
  • Customer Value: As interest rates look set to fall and inflation increase, firms should consider how products are delivering value to customers, especially those products which are held for lengthy periods such as investment funds and pensions. Firms may need to identify market and economic condition triggers for review, processes to communicate with customers and help them understand what situation means for them and the options available to them.
  • Conduct Regulatory Horizon: John Griffith Jones (Chairman of the Financial Conduct Authority – FCA) has reminded the market that whilst the UK is leaving the EU, the FCA will still have membership in global bodies such as the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO).4  The Financial Times reported him forecasting that more financial regulation will now be set at this international level.5  Firms should also remember that the UK has often gold-plated EU regulations with its own conduct guidance such as with The Senior Managers Regime, the Fair and Effective Markets Review and the Fair Advice Market Review and should the UK stay in the single market it is unlikely that firms within the UK will be able to avoid EU regulations or be operating in more permissive environment.
  • Increased Monitoring: Compliance should monitor BREXIT carefully to understand what the likely effects are from a regulatory and market perspective as this will need to be built into their risk assessments and future planning.

To conclude Mr Griffith Jones did answer his question ‘how important will conduct be in the future?’. He said “very.”6 He stressed that it will be business-as-usual at the FCA;7 Accenture’s view is that it should not be business as usual for compliance.  The workload of compliance has only increased with this Brexit decision and key focus areas are for banks, insurers and capital markets firms should be on maintaining strong leadership, staff communication, employee surveillance and advanced monitoring across customer databases and of market conditions.

For more on Brexit, see a blog post covering the regulatory impacts of Brexit on financial services.


  1. “Commission extends by one year the application date for the MiFID II package,” European Commission, Press Release, February 10, 2016. Access at:
  2. Brexit – The effect on asset and wealth management,” Norton Rose Fulbright, June 2016. Access at:
  3. “Brexit: It’s time to get out of your London bubble and understand the nation,” Campaign, June 28, 2016. Access at: “Brexit and the making of a global crisis,” Financial Times, June 24, 2016. Access at:
  4. Global regulation in the post-crisis era,” Financial Conduct Authority, June 30, 2016. Access at:
  5. “FCA Calls for Broad Brush Plans from Brexit,” Financial Times, June 30, 2016. Access at:
  6. Global regulation in the post-crisis era,” Financial Conduct Authority, June 30, 2016. Access at:
  7. “FCA Calls for Broad Brush Plans after Brexit,” Financial Times, June 30, 2016. Access at:

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