Review Of Senior Managers & Certification Regime Launched

Dec 19, 2022 11:07:34 AM

What has happened?

In December 2022, the Chancellor of the Exchequer announced a set of reforms, referred to as the Edinburgh reforms, intended to drive growth and competitiveness in the UK’s financial services sector.

What are the key points of the reform?

In the recent Autumn Statement, the Chancellor highlighted financial services as one of the UK’s five key growth sectors. In a written statement to Parliament on 9 December 2022, he set out a collection of announcements taking forward the government’s ambition for the UK to be the world’s most innovative and competitive global financial centre.

The government is setting out how the framework for financial services regulation will adapt to support a dynamic, stable, and competitive financial services sector. To take this forward, the government is:

Reforming the ring-fencing Regime for banks
Issuing new remit letters for the PRA and FCA with clear, targeted recommendations on growth and international competitiveness
Publishing the plan for repealing and reforming EU law using powers within the FSM Bill, building a smarter regulatory framework for the UK
Overhauling the UK’s regulation of prospectuses
Reforming the Securitisation Regulation
Repealing the Packaged Retail and Insurance-based Investment Products (PRIIPs Regulation), and consulting on a new direction for retail disclosure
Intending to repeal EU legislation on the European Long-Term Investment Fund (ELTIF), reflecting that the new UK Long-Term Asset Fund (LTAF) provides a better fund structure for the UK market
Launching a Call for Evidence on reforming the Short Selling Regulation
Publishing a draft Statutory Instrument to demonstrate how the new powers being taken forward in the FSM Bill will be used to ensure that the FCA has sufficient rulemaking powers over its retained EU payments legislation
Consulting on removing burdensome customer information requirements from the Payment Accounts Regulations 2015
Welcoming the PRA consultation on removing rules for the capital deduction of certain non-performing exposures held by banks
Bringing forward secondary legislation to implement Wholesale Markets Review reforms
Establishing an Accelerated Settlement Taskforce
Committing to establishing the independent Investment Research Review
Commencing a review into reforming the Senior Managers & Certification Regime in Q1 2023
Committing to having a regime for a UK consolidated tape in place by 2024
Consulting, in early 2023 on issuing new guidance on Local Government Pension Scheme asset pooling
Increasing the pace of consolidation in Defined Contribution pension schemes
From April 2023, improving the tax rules for Real Estate Investment Trusts
Announcing changes to the Building Societies Act 1986
Delivering the outcomes of the Secondary Capital Raising Review, and
Consulting on reform to the VAT treatment of fund management

The government is also acting to ensure the UK retains global leadership in the ESG sector, helping to unlock the private financing needed for Net Zero. The steps announced are:

Publishing an updated Green Finance Strategy in early 2023, and
Consulting in Q1 2023 on bringing Environmental, Social, and Governance ratings providers into the regulatory perimeter

The government also intends to ensure that the regulatory framework supports innovation and leadership in emerging areas of finance, facilitating the adoption of cutting-edge technologies. The measures below build on the FSM Bill, which will establish a safe regulatory environment for stablecoins – which may be used for payments – and ensure the government has the necessary powers to bring a broader range of investment-related cryptoasset activities into UK regulation. The government is:

Consulting on a UK retail central bank digital currency alongside the Bank of England in the coming weeks
Publishing a response to the consultation on expanding the Investment Manager Exemption to include cryptoassets
Implementing a Financial Market Infrastructure Sandbox in 2023, and
Working with regulators and market participants to trial a new class of wholesale market venue which would operate on an intermittent trading basis.

The government will continue to work with regulators and the industry to ensure the sector is delivering for people and businesses across the UK. The government is:

Consulting on Consumer Credit Act Reform
Laying regulations in early 2023 to remove well-designed performance fees from the pensions regulatory charge cap
Committing to work with the FCA to examine the boundary between regulated financial advice and financial guidance

How can we help you?

If you’d like to know more about how we can help you with your PRIIPs, payment accounts, ESG or SM&CR arrangements, or any other regulatory compliance issues, our specialist team is here to help.

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