The long awaited Financial Services & Markets Bill was officially announced in Parliament today. Here’s the word from HM Govt, plus comment from LIIBA and LMG below;
Legislation to enhance the competitiveness of the UK financial services sector and unlock tens of billions of pounds of investment across the UK economy was introduced to Parliament today (Wednesday 20 July).
The Financial Services and Markets Bill repeals hundreds of pieces of EU retained law to deliver a comprehensive model of regulation for the UK – establishing a coherent, agile and internationally respected approach to financial services regulation that works in the interests of British people and businesses. The Bill will implement the government’s vision for the sector that is open, green, technologically advanced and globally competitive – while maintaining high levels of consumer protection.
Chancellor of the Exchequer, Nadhim Zahawi said:
“Today is a landmark day for financial services in the UK.
“Through the introduction of this Bill, we are repealing hundreds of pieces of burdensome EU regulations and seizing on the benefits of Brexit to ensure the financial sector works in the interests of British people and businesses.”
The Bill implements the outcomes of the Future Regulatory Framework Review, giving the financial regulators greater responsibility for setting the requirements for UK financial services, and for the first time, a new secondary objective to promote the growth and competitiveness of the UK economy including the financial services sector. This will complement the regulators’ existing objectives of ensuring the safety and soundness of firms, protecting and enhancing the integrity of the UK financial system, promoting competition in the interests of consumers, and ensuring that consumers receive an appropriate degree of protection.
The Bill also includes enhanced mechanisms for engagement with stakeholders and accountability, scrutiny and oversight of the regulators by Parliament and the Treasury. This includes a new ‘rule review’ power which will enable the government to direct the regulators to review their rules where it is in the public interest.
To maintain the UK’s position as an international, open and competitive financial centre, the Bill will reform EU-derived legislation governing our capital markets, ensuring that our rulebook is fair, outcomes based and maintains high regulatory standards.
NEW FCA POWERS
This includes removing the share trading obligation and double volume cap from MiFID II, which restrict how and where firms can execute trades, and granting the FCA new powers to enhance the transparency and effective function of markets.
The Bill will also give new powers to the government and regulators to better enable them to implement Mutual Recognition Agreements – which are agreements between two trading partners, designed to remove technical and regulatory barriers to trade.
To ensure the UK remains at the forefront of new technologies and innovations, the Bill will enable certain types of stablecoins to be regulated as a form of payment in the UK. In fostering these new innovations, the Bill will also enable the creation of Financial Markets Infrastructure Sandboxes – allowing firms to test the use of new technologies and practices in financial markets, increasing efficiency, transparency and resilience of new products.
DESPITE THE WEF, CASH MAY HANG ON FOR SOME YEARS YET
It’s well known that the WEF, Davos and other globalist organisations would love to abolish cash, replacing it with a social credit score like China, but the Bill seeks to protect cash access in the UK.
“As part of plans to ensure consumers are protected, the legislation includes measures that will safeguard access to cash for generations to come; powers to enable the Payments Systems Regulator to direct banks to reimburse victims of APP fraud; and establishes a new regulatory pathway for firms to be able to approve financial promotions, ensuring they better reflect FCA rules which state that promotions should be fair, clear, and not misleading.
As part of this approach, the government will ensure greater financial inclusion through powers enabling credit unions, which provide low-interest forms of credit, to offer a wider range of products to their members.”
Responding to the publication of the Government’s Financial Services and Markets Bill today, CEO of broker representative body LIIBA, Christopher Croft, said:
“The London market is the leading global centre for commercial risk and reinsurance but other international centres are snapping at our heels and doing business in the UK is increasingly seen as having a greater burden of regulatory costs.
“Government legislation for a regulators’ competitiveness objective is welcome but will only work if matched by a strong culture, capacity and capability in the regulator. We would like to see the legislation include a requirement for metrics to be set and reported on by the regulators, to incentivise and track concrete action on competitiveness.”
LONDON MARKET GROUP
Regarding yesterday’s publication of the draft wording for the new Financial Services and Markets Bill, Caroline Wagstaff, Chief Executive of the London Market Group said:
“The London Market Group has been asking for a growth and competitiveness objective for the regulators for a number of years, so it is good to see that this is a key element of the reforms. There remain questions about what the regulators need to be doing to show that they are fully considering our competitive position. The Bill gives them a great deal more power but on our initial reading, it appears they also have the power to set and mark their own homework. We need to see more detail on the accountability measures that government and parliament will have to ensure that we get the culture change we need. We want the new objective to make a real difference but without the necessary performance criteria in the Bill, our fear is that it could be treated as a tick box exercise rather than something which can seriously support UK competitiveness.”