By Daniel Lanyon on Wednesday 10 November 2021
The Chancellor has set out plans for new UK financial regulation he says will drive growth including more governmental oversight of the Financial Conduct Authority and Prudential Regulation Authority.
The fintech boom in the UK is in no small part thanks to regulation. Now, the UK’s Chancellor Rishi Sunak is setting out new plans for a “once-in-a-generation” reform of UK financial services regulation following the UK’s departure from the EU.
Sunak vision for a new post-Brexit era of financial regulation will focus on “an agile and dynamic approach to regulation that supports the growth of the UK economy”.
The government has launched a consultation, which closes 9 February 2022, after which the government will consider the responses.
The proposals, set out yesterday at the same time as the launch of a consultation, will repeal of the majority of EU financial services law as well and give the UK regulators the powers to replace the law with their own rules. This, Sunak believes, will result in an "adaptable and dynamic UK regime supporting the UK’s commitment to high standards of regulation in the future."
According to a media statement, the chancellor said that while the UK was a member of the EU, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority's (PRA), part of the Bank of England and issuer of banking licenses, ability to determine the most appropriate regulatory requirements for UK markets was constrained by strict requirements to apply EU rules.
As part of the plans, the UK parliament and HM Treasury have more power to scrutinise and oversee the FCA and PRA.
The new regime will mean the government will set UK regulators an objective to facilitate the long-term growth and international competitiveness of the UK economy.
“Earlier in the year, I set out my vision for an open, green, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens across the UK, creating jobs, supporting businesses and powering growth across the UK,” Sunak said.
“Today’s proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.”
You can find the full consultation document here.