What’s next?
The Chancellor of the Exchequer announced the “Edinburgh Reforms” back in early December 2022. The Government’s intentions were made clear – it was poised and ready to implement significant reforms to the financial services industry in 2023, and beyond. No more standing still and watching what happens after Brexit.
In a sense, this isn’t new, and doesn’t come as a complete shock to the industry. The FCA has been gearing up for this moment, in its own move towards being a more proactive, robust regulator with the protection of consumers at the forefront of its mind. Examples of this include a focus on early intervention and supervision; the new Consumer Duty principle; and changes to the financial promotions regime.
The Financial Services and Markets Bill (FSM Bill) which, when enacted, will also provide the Government with newly appointed powers and tools to meet its ambition; moving away from the pan-European ideals and to make the UK “the world’s most innovative and competitive global financial centre” [1] for consumers, businesses and markets alike.
What does this mean in practice?
Simply put, the Edinburgh Reforms outline the Government’s approach in its vision for the financial services sector; building on its work to date, such as in the FSM Bill, which lays the groundwork for many of the proposed reforms, including a repeal of retained EU Law. The Edinburgh Reforms set out steps to have “an open, sustainable, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses, and powering growth across all four nations of the UK.” [2]
There are many changes being put forward, some of which we have highlighted in our series of Spring articles.
How might this affect my business?
2023 will be a year of continual change for financial services businesses and consumers. The FCA, for example, will be implementing the reforms into its own rules and guidance, which in practice will be reflected in its reporting requirements, application forms and supervisory and enforcement actions against firms.
Your firm will need to be prepared to meet the FCA’s current rules, but also anticipate potential changes in your sector/portfolio. Broadly speaking, the anticipated changes are supposed to be for the better, however, you need to know what these changes are and whether – for example – as a previously unregulated AIFM, or crypto asset business, you now fall within the scope of regulation. The boundaries, rules and expectations are changing, so it’s important to understand how, and to what extent, they apply to your firm individually and your sector.
If you have any questions, read more and get in touch with our Financial Services team here.
