Financial Services and Markets Bill – Is this the next big shift for UK financial services
It comes as no big surprise that the FCA did not significantly alter the Consumer Duty’s core provisions after its second consultation. The FCA has maintained its commitment to all fundamental principles and the intent of the Consumer Duty in the wake of an unprecedented level of industry engagement and feedback, but it has also demonstrated that it was paying attention by making a number of changes to its rules and offering additional guidance.
The financial services industry is crucial to the UK economy, and the Financial Services and Markets Bill is essential to realising the government’s vision of a transparent, environmentally friendly, and technologically advanced financial services industry that is competitive on a worldwide scale.
In general, the bill is stated to take use of the benefits of the EU Exit by customising financial services regulation to UK markets to increase the UK’s competitiveness as a global financial centre and produce better results for both businesses and consumers.
Here is all you need to know about what the new measure will focus on.
What will the new measure include?
Implement the recommendations of the upcoming regulatory framework review, uphold the UK’s status as a transparent and international financial centre, take advantage of new technological advancements in the financial services industry, increase the competitiveness of UK markets and encourage the efficient use of capital, and support the levelling up agenda while promoting financial inclusion and consumer protection.
The call out and “call-in” capabilities for HM Treasury are possibly the two most important problems in terms of the regulatory framework review. They were much discussed prior to publication, but they are currently being pointed out and excluded from the law post-publication. The second concern is where such regulatory power scrutiny will reside: with regulators or, ideally, in a combination with a significant and explicitly defined role for Parliament.
With regards to the crypto assets, the UK is set to safely accept crypto assets, in its bid to strengthen the UK’s position as a leading centre for technology. The goal is to make the UK one of the most vibrant financial centres in the world.
The UK is open for business, the government has made it very plain to companies who deal in crypto assets. The Government has committed to consulting on regulation on a broader set of crypto asset activities later this year and has announced several reforms to position the UK as a crypto asset technology hub. These include legislation to bring stable coins into payments regulation and exploring ways to make the UK tax system more competitive to support the growth of the crypto asset market.
Updates in the realm of payments
The bill’s Section 22 grants HM Treasury new authority to create customised rules for the regulation of payments, payment systems, and service providers in relation to payments that include “digital settlement assets,” which include any digital representation of value or rights, whether or not they are cryptographically secured.
(a) may be applied to the payment of obligations.
(b) may be electronically transferred, stored, or exchanged, and
(c) makes use of data-supporting technology, such as distributed ledger technology, for recording or storing data.
Support the levelling up agenda, promote financial inclusion and consumer protection
It is hoped that this will provide the government the ability to establish clearer regulatory guidelines for payments technology that uses distributed ledger technology or other types of cryptography. With such cutting-edge technologies as DLT, the UK has a great chance, and the bill’s provisions should undoubtedly assist with this.
New company and recruiting strategies will be dependent on the contingent workforce.
Companies struggle with a lack of specialised skills while also wanting more flexibility in their talent investments. As a result, contingent talent is now a part of new employment models and initiatives. Because of this, it is impossible to overestimate the significance of contingent workforces
A movement in both hiring and retaining key employees can be seen in the current workforce trends and advancements, while past occurrences can only partially predict the future. The past two years have shown how crucial the contingent labour is to the financial services industry. Additional staff support was and is needed due to the overwhelming regulatory and policy demands from the post-Brexit period as well as the growing cyber threat.
Many financial institutions have turned to the contingent workforce to help in areas of weakness or areas where they do not have enough in-house capacity to cope with additional demands.
Firms should act quickly to establish new hiring methods that accommodate the shifting personnel scenario, which includes more financial crime, increased regulatory demand, and additional BAU work as a result of the pandemic’s delays. Contingent staff offer key skills and a bigger pool of talent which allow for BAU to resume, but also allow for outsourced teams to be set up quickly to complete additional work demands being placed on firms.
If your business needs additional staffing support in your compliance departments, speak to us to see how we can help in supplying experienced and effective additional members to your team.
- cc. (2022). EXCLUSIVE: Are UK Regulators Now Firmly Behind Stablecoins?_蜜蜂查. [online] Available at: https://mifengcha.com/news/62f2214ff832212a445ea4c0 [Accessed 12 Aug. 2022].
- UK. (2020). Financial Services and Markets Bill. [online] Available at: https://www.gov.uk/government/collections/financial-services-and-markets-bill [Accessed 12 Aug. 2022].
- JD Supra. (n.d.). Global Payments Newsletter, May 2022. [online] Available at: https://www.jdsupra.com/legalnews/global-payments-newsletter-may-2022-7234703 [Accessed 12 Aug. 2022].