On 10 July 2023, Chancellor Jeremy Hunt delivered his inaugural Mansion House speech, which largely focused on the government's plans to enable the financial services sector to increase returns for pensioners, improve outcomes for investors and unlock capital for growth businesses. In his speech, the Chancellor set out the government’s Mansion House Reforms, which build on the Edinburgh Reforms announced in December 2022 (see FC Feature 9 December 2022) and the vision for financial services which the then-Chancellor spoke about in his 2021 Mansion House speech (see FC Feature 1 July 2021) of an open, sustainable, innovative and globally competitive sector.
As part of the Edinburgh Reforms, HM Treasury had published Policy Statement: Building a smarter financial services framework for the UK, which outlined the government's approach to repealing retained EU law in financial services and delivering a new regulatory framework under the umbrella of the Financial Services and Markets Bill. The Bill became the Financial Services and Markets Act 2023 when it received Royal Assent on 29 June 2023 (see FC Feature 29 June 2023). Under the latest Mansion House Reforms, the Treasury published Plan: Building a Smarter Financial Services Regulatory Framework for the UK, a follow-up paper, describing how it will deliver this approach in practice.
In addition, the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023 were made on 10 July 2023, which bring certain provisions of FSMA 2023 into force on 11 July 2023, with further provisions coming into force on 29 August 2023 and 1 January 2024. This sees the beginning of the revocation of retained EU law in relation to financial services. In his Mansion House speech, the Chancellor states that the government is 'commencing repeal of almost 100 pieces of unnecessary retained EU law'.
FC Legislation is in the process of being updated.
Treasury Plan: Building a smarter financial services framework
Background
FSMA 2023 repeals retained EU law on financial services and establishes the statutory framework for a comprehensive FSMA model of regulation through which the Treasury and financial services regulators will create legislation and rules designed specifically for the UK markets. The Plan details the government's approach to delivering the repeal of retained EU law and explains how the government intends to deliver significant progress by the end of the year.
Prioritisation and implementation timetable
The Treasury is commencing the repeal of retained EU law in a phased manner to ensure industry can plan ahead. In table format, the Plan shows the government's progress so far as well as looking forward to tranches one and two, as previously announced in December 2022. The table also details when it is estimated that the relevant legislation and any consultation responses will be available.
Going forward, the government intends to use the Regulatory Initiatives Grid (see FC Feature 28 February 2023) to provide stakeholders with an overview of the pipeline for regulatory updates on the repeal programme.
Use of FSMA 2023 powers
Alongside its Plan, the Treasury has published a near-final version of the statutory instrument outlining the new public offers and admissions to trading regime, as well as an accompanying policy note (Policy Paper: Public Offers and Admissions to Trading Regulations 2023 – Draft SI and Policy Note). As part of the Edinburgh Reforms, the government had published an illustrative statutory instrument to demonstrate to stakeholders how the powers introduced in FSMA 2023 would be used to deliver reforms to the UK's prospectus regime (see FC Feature 9 December 2022). The government welcomes any technical comments on the near-final draft statutory instrument by 21 August 2023.
Other Mansion House Reforms
Other initiatives and updates announced by the Chancellor include:
- the government welcomes Rachel Kent's Review: UK Investment Research, also published on 10 July 2023 (see FC Feature 11 July 2023), and has accepted all recommendations made in it, paving the way for a new 'Research Platform' that will provide a one-stop shop for firms looking for research experts;
- a commitment to establish a new 'intermittent trading venue' that will improve private companies’ access to capital markets before they publicly list. The new intermittent trading venue will be operational before the end of 2024; and
- the government welcomes Interim Report: Digitisation Taskforce (see FC Feature 11 July 2023), which suggests ways to move to fully digital shares, scrapping outdated paper-based shares (HM Treasury Press Release).
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