The UK Government has introduced legislation to ‘enhance the competitiveness of the UK financial services sector’ to Parliament.
According to GOV.UK, the Financial Services and Markets Bill will repeal hundreds of pieces of EU retained law to deliver a model of regulation for the UK. The government claims this will establish a ‘coherent, agile and internationally respected approach to financial services regulation that works in the interests of the British people and businesses’.
The bill will also seek to implement the government’s vision for the sector, which it claims is ‘open, green, technologically advanced and globally competitive’ – whilst also maintaining consumer protection.
In addition, GOV.UK claims the bill will implement the outcomes of the Future Regulatory Framework Review, which will give financial regulators more responsibility for setting the requirements for UK financial services. Also, for the first time, it will provide a new secondary objective to promote the growth and competitiveness of the UK economy.
The Bill also includes strengthened mechanisms for engagement with stakeholders and accountability, scrutiny, and oversight of the regulators by Parliament and the UK Treasury. This includes a ‘rule review’ power that will allow the government to direct the regulators to review their rules where it is in the public interest.
The government noted that the Bill will also reform EU-derived legislation governing the UK’s capital markets, making sure that the country’s rulebook is fair, outcomes-based and also maintains high regulatory standards. This will include removing the share trading obligation and double volume cap from MiFID II, which restricts how and where companies can execute trades. The Financial Conduct Authority will also be given new powers to enhance the transparency and effective function of markets.
New powers will also be given to the regulators and government itself to better enable them to implement Mutual Recognition Agreements, which are agreements between two trading partners designed to eliminate regulatory and technical barriers to trade.
In the area of stablecoins, the Bill will enable certain types of them to be regulated as a form of payment in the UK. The Bill will additionally enable the creation of Financial Markets Infrastructure Sandboxes, which allow firms to test the use of new technologies and practices in financial markets.
The legislation also includes measures that safeguard access to cash for future generations, as well as powers to enable the Payments Systems Regulator to direct banks to reimburse victims of APP fraud and the establishment of a new regulatory pathway for businesses to be able to approve financial promotions.
UK Chancellor of the Exchequer Nadhim Zahawi said, “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.”
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