The choice by the International Regulatory Strategy Group (IRSG), a London-based financial industry advocacy group, to name Kay Swinburne as its new chair, appears to be a good match, considering her past positions and work concerning regulatory compliance matters between the UK and the EU.
While representing Wales in the European Parliament from 2009 to 2019 as a Conservative party member, Swinburne advocated on behalf of the UK’s interests and broadly against having too much regulatory bureaucracy or red tape – consistent with that party’s positions. Her background includes investment banking experience as well as local politics before being elected to the European Parliament. However, more recently, after leaving Parliament, as vice chair of financial services at KPMG, she has taken positions supportive of setting ESG (environmentally sustainable growth) investment standards and compliance with such standards.
The Focus of the International Regulatory Strategy Group
IRSG has been focused on four areas: financial regulation architecture, data, ESG and UK regulatory regimes for foreign firms. The group has supported the EU’s Capital Markets Union plan, instituted in September 2020, which created a single market for capital and a framework for addressing economic recovery after the Covid-19 pandemic, environmental efforts and a digital strategy for technology and the economy.
2021 is also an important year for the UK in European and global leadership efforts, because the country will host the G7 summit to begin on June 11. Just as the International Regulatory Strategy Group supported the EU CMU goals, it also is backing a G7 agenda covering regulatory coherence in addressing recovery from the pandemic, a climate change recovery agenda and digital business and technology policy continuity. The digital provisions include promotion of partnerships to address anti-money laundering, regulatory technology for data and global data challenges such as data standards.
On practical issues concerning how the UK interacts with the EU, including on financial regulation issues, after Brexit, IRSG favors continued alignment with the EU taxonomy for classifying investors, companies and financial firms based on the environmental sustainability of their activities. IRSG also announced in January that it supports the EU’s Digital Operational Resilience Act aimed at cyber security and risk management.
A history of regulatory experience
Over the course of her service in the European Parliament, Swinburne pursued reform of EU regulatory practices, but also helped draft policies on financial market trading, securities settlement rules and central securities depository (CSD) requirements, and recovery tools for central counterparties and CSDs. She also worked on the creation of the European Securities and Markets Authority at the start of 2011.
On the other hand, even though Swinburne, as a member of the Parliament, worked on the MiFID II legislation updating Europe’s regulation and standardization of financial industry practices, she also said the UK should not rely on EU equivalence rules after Brexit. “If I had known the UK would rely on it, we would have drafted it a little bit better in MiFID,” she told Bloomberg News in 2018.
Swinburne’s policy positions, contributions to how regulation was drafted and promotion of UK interests all align very closely with the IRSG’s mission. ESG is an area where IRSG takes a more progressive point of view, which Swinburne has a recent track record of supporting while at KPMG.
Since she had a hand in drafting European financial industry regulations in recent years, she likely tempered their reach and strictness in line with a conservative approach to regulation. Swinburne has reminded Brexit proponents of the importance of the UK continuing to work and trade with EU countries, while still saying the UK shouldn’t automatically bow to all of the EU’s rules (such as equivalence guidelines) in order to keep those trade channels open. Without a doubt, IRSG must be glad to have her at the helm.