07.21.2022

UK Financial Services Bill Welcomed

07.21.2022
Shanny Basar
UK Financial Services Bill Welcomed

The UK Government published on July 20 the Financial Services and Markets Bill.

Following the publication of the UK Financial Services Bill, Adam Farkas, Chief Executive of the Association for Financial Markets in Europe (AFME), said:

“AFME welcomes the Financial Services and Markets Bill setting out the UK Government’s vision for the future of the financial services sector in the UK. This will deliver meaningful change and is complementary to AFME’s long standing position in support of high regulatory standards, financial stability, competitive markets, sustainable growth, appropriate levels of investor protection and responsive legislation for financial services.

AFME is pleased to see the introduction of a new secondary objective on international competitiveness and economic growth for financial services regulators. This approach will ensure high regulatory standards are maintained while also putting an appropriate level of focus on competition.

“AFME also welcomes, in particular, the proposed legislative change to remove the share trading obligation (STO) and the double volume cap (DVC). These features were not conducive to supporting secondary market liquidity and their removal will help to boost the attractiveness of capital markets in the UK, making them more agile and promoting better outcomes for investors.

“We also look forward to engaging with the Bank of England and Financial Conduct Authority as they build their rulebooks in light of their new powers.”

Source: AFME

Janine Hirt, CEO of Innovate Finance, said:

“Our latest figures on Fintech investment and the City of London and HM Treasury’s ‘State of the Sector’ report show that innovation is a ‘super strength’ of financial services across the UK, with continued growth in investment in UK Fintech in the first half of this year. The Chancellor has set out important next steps for the UK to strengthen its global position in FinTech and boost international competitiveness. 

“The Government’s Financial Services and Markets Bill will introduce a very welcome competitiveness objective for regulators. The Bill also introduces essential enabling powers for regulators to bring crypto-assets and stablecoins into their remit. Together, these will form the basis for the UK to continue creating the best regulatory environment in the world for innovation – including crypto – to flourish and for consumers to benefit.

“The Austin review of secondary listings, published yesterday and backed by the Chancellor, provides further stimulus for investment in FinTech growth. This includes reforms to pre-emption rights which were recommended in the Kalifa Review of Fintech. The new Digitisation Task Force, chaired by Sir Douglas Flint, will take forward  Austin’s proposals for  digitisation of shares, which will help position the UK as a centre for a new wave of innovation in capital markets infrastructure, complementing provisions in the Financial Services and Markets Bill that enable regulatory ‘sandbox’ pilots for programmable and blockchain-enabled capital markets. 

“A new regulatory approach, unlocking investment, creating a proportionate regime for stablecoin and crypto-assets, and building fully digital capital markets – all these components will play an integral part in the next phase of the UK building on its remarkable global FinTech prowess.”

Source: Innovate Finance

Commenting on the Financial Services and Markets Bill, Chris Cummings, Chief Executive of the Investment Association, said:

“The Financial Services and Markets Bill is an important pillar to ensure the UK remains a leading centre for global investment management delivering for savers and investors. Our industry welcomes the proposals in the Bill and hopes to see it deliver on its promise to promote innovation and provide a regulatory framework fit for the modern economy. We also welcome the increased focus on competitiveness and economic growth. This will be vital to enable our industry to provide the very best products and services, supporting UK consumers to secure a better future. We look forward to working with the government to deliver on these aims, so that the UK remains the most inclusive, open, and internationally attractive place to do business in the world.”

Source: IA

The UK Government has (20 July) published the Financial Services and Markets Bill.

In response, the City of London Corporation’s Policy Chairman, Chris Hayward, said:

“The Financial Services and Markets Bill is an opportunity to ensure the UK’s world-leading financial and related professional services ecosystem remains open, competitive, innovative and attractive to global talent.

“This is vital as the sector employs 2.3 million people across the country, with two-thirds of these jobs outside of London. It plays a key role in driving growth, support investment and facilitating trade.

“The UK must have a world-leading regulatory regime with high standards to remain competitive on the global stage. That is why we welcome the introduction of a new secondary objective for the financial regulators to promote growth and international competitiveness, as confirmed by the Chancellor in his speech at the Mansion House last night.

“This approach will support the UK Government’s broader economic policy and is in line with regulatory objectives in other overseas jurisdictions. It also makes clear that competition, consumer protection and financial stability should remain the clear primary focus of regulators.

“Our State of the Sector report – which will published in partnership with HM Treasury today – draws on widespread consultation and robust metrics to highlight a number of opportunities to strengthen the sector’s competitiveness. 

“We will work with the Government to ensure the proposals benefit households, consumers and businesses while also ensuring the sector’s competitiveness.”

Source: City of London Corporation

Michael Carty, Chief Executive Officer, Euroclear UK & International, said in an email:

“The efforts to modernise gained pace with the publication of the UK Secondary Capital Raising Review on 19 July 2022. Digitising paper share certificates to drive innovation and efficiency—while maintaining investors’ rights— is pivotal in the modernisation of post-trade and will enhance the UK’s position as a FinTech hub and premier centre for capital raising. 

“The details of the transition are a work in progress and we recognise that collaboration is vital to address the needs of both issuers and investors. This is why we are looking forward to working closely with all parties and stakeholders input will be vital in determining the best mechanism to capture and record shareholdings in a digital register.

“We welcome Mark Austin’s digitisation recommendation and look forward to working with Sir Douglas, government, industry and investor communities to deliver on this ambitious vision.”

Source: Euroclear

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