The Financial Services Bill receives Royal Assent: What does this mean for your business?
On the 29th of April 2021, The Financial Services Bill received Royal Assent, meaning it is now written into law. This marks an important milestone in shaping a regulatory framework for the UK financial services industry outside of the EU.
The UK will now, for the first time since it initially became full members of the European Union, be able to have complete control over the regulation of its financial services industry.
The new Act aims to ensure that the UK remains an open and dynamic global financial centre, with the highest regulatory standards, whilst also protecting personal and commercial customers across the UK as they use financial services products and interact with financial services businesses.
What are the biggest impacts from the bill likely to be for the UK financial services sector?
The biggest impact the Act will have is to promote financial stability and give powers back to the FCA to oversee and rule-on key regulatory frameworks.
Some of the most likely and pertinent outcomes of this focus on stability and FCA oversight are:
- Ensuring that a robust and effective regulatory framework for financial services is created.
- The implementation of the remaining Basel III standards: This will mean a new prudential regime for investment firms, allowing the FCA to control the LIBOR transition in an orderly fashion.
- Promoting cross market openness: The Act will simplify the route to overseas investment funds.
- More focus on the consumer: protecting consumers who use a range of financial services, by bringing interest-free, buy-now-pay-later products into regulation, and improving access to cash by making it easier for retailers of all sizes to offer cashback without the need for a purchase to have been made.
- Extension of imprisonment for abusers: An extension to the maximum sentence for criminal market abuse offences from seven to 10 years’ imprisonment.
What are the next steps post the granting of Royal Assent?
There are currently still hopes of an ‘equivalence’ deal that would see UK’s financial services regulations being completely aligned with that of the EU, however many industry experts feel that this is an unrealistic expectation.
In the interim, UK participants will need to ensure at the very least that their compliance function meets the requirements of the new Act.
The UK will no longer be able to submit simplified EDD checks, and newer, more strenuous AML checks will have to be submitted. UK businesses must also ensure that they meet KYC standards which are permissible in certain EU member states.
EU Members follow a combination of guidelines established under both the Financial Action Task Force (FATF) and the Implementation of AML Directives, the latest being AMLD5. There is also the upcoming AMLD6, and National AML Acts which members will also be required to adhere to.
What will these changes mean for resource planning?
Many UK financial services businesses are increasingly turning to a contingent workforce to help them deal with the additional pressures that are being placed on their compliance teams.
There has never been a greater need to adequately staff the industry at a time when the extreme circumstances in which we find ourselves have led to all sorts of new ways of working, and in-turn effectively managing client and customer needs and expectations has never been more challenging.
In-turn, during 2020 and into 2021, record levels of demand have been recorded for the need for contingent roles to be filled, requiring skilled individuals to staff customer and public-facing call centre, operations, claims management, and loan deferment roles.
How can Momenta help your business overcome these challenges?
For over 30 years, Momenta has deployed skilled contingent professionals within the financial services industry, especially during times of crisis when organisations need to implement contingent workforces on a tight deadline due to market disruption or regulatory change.
Today, our global ecosystem of over 30,000 associates, provide professional services to leading companies worldwide. Our clients rely on the knowledge and experience of our associates to fill their own skills gap, delivering on key projects both efficiently and economically.
More importantly, Momenta understand the actual tasks that you may want assistance with. So rather than merely sending you CVs or bodies, we can ensure that we pre-screen our associates fully and effectively.
Our account managers will be familiar with your challenges and understand not only the deliverables you need to provide within your organisation, but the challenges you will be facing in setting up the units you need to satisfy your business requirements, and your clients expectation of service.