This annual publication explores some of the core focus areas for UK-regulated financial services firms in the year ahead. 2023 saw significant progress on the regulatory reform agenda, and many measures consulted on or reviewed as part of the Edinburgh Reforms will be finalised and/or implemented in the course of 2024.

We also saw the passing of the Financial Services and Markets Act 2023, many provisions of which have already come into effect and have made important changes to the

Monitoring the progress of the Financial Services and Markets Bill and regulatory divergence between the UK and the EU will continue as a key theme in 2023. 

The Financial Services and Markets Bill leaves a significant amount of the essential regulatory detail to be developed later by HM Treasury (through regulations), followed by development of the specific rules by the regulators. Therefore, firms operating in the financial services sector will face legal and regulatory uncertainty as to the UK’s regime

The consultation response heralds innovation-friendly reform to the UK wholesale capital markets regime.

By Rob Moulton and Dianne Bell

On 1 March 2022, HM Treasury published its response to the July 2021 consultation on the Wholesale Markets Review after considering the feedback received. The consultation response sets out changes that are expected to “liberate businesses from unwieldy and stifling rules that hold back their ability to grow and innovate”, according to Economic Secretary to the Treasury John Glen.

The regulators suggest improvements to the supervision of firms passporting retail products and services in the EU.

By Rob Moulton, Thomas Vogel, and Charlotte Collins

The French and Dutch financial services regulators (the AFM and the AMF) have published a joint position paper on strengthening conduct supervision of cross-border retail financial services.

The regulators are concerned that the current split of responsibilities between home and host state regulators in relation to cross-border retail business needs to be adjusted to ensure better consumer protection. While the paper does not represent agreed EU policy at this stage, it gives a clear picture of the regulators’ views in these prominent jurisdictions, and could well lead to changes to the supervisory approach in the future.

This annual publication outlines some of the primary focus areas in 2022 for UK-regulated financial services firms. There has been a marked shift away from dealing with immediate post-Brexit priorities to more fundamental consideration of the direction of travel of UK financial services regulation, and this is borne out across many of the topics covered in this year’s publication.

While monitoring regulatory divergence between the UK and the EU will be a key theme for 2022, other familiar topics will

UK rules will diverge from the much-criticised EU framework.

By Nicola Higgs and Charlotte Collins

On 20 July 2021, the FCA published a Consultation Paper (CP21/23) on amending the UK PRIIPs Regulation. The FCA has long held concerns about the PRIIPs framework, and pre-Brexit had been heavily involved in efforts to persuade EU lawmakers to amend the rules. The UK government and the FCA had indicated that the UK PRIIPs Regulation would be a priority area for change post-Brexit, given the consumer protection concerns arising as a result of ambiguities and unintended consequences of the rules. Now that the FCA has the flexibility to amend the regime, the regulator is looking at how it can address some of the most serious concerns, which will come as welcome relief to market participants.

A report from the Taskforce on Innovation, Growth and Regulatory Reform provides recommendations for how the UK can “re-imagine” its approach to regulation post-Brexit.

By Rob Moulton, Stuart Davis, and Charlotte Collins

On 16 June 2021, the Taskforce on Innovation, Growth and Regulatory Reform (the Taskforce) published a report (the Report) providing recommendations for how the UK could “refresh” its approach to regulation post-Brexit. The UK government convened the Taskforce in February with the directive to “re-imagine, quickly and creatively, the UK’s approach to regulation”.

The Report, which covers a broad range of sectors, includes notable recommendations in relation to financial services regulation. While it does not suggest a “bonfire of regulations”, the Report does convey a desire to move away from the European style of technical and prescriptive rule-making. The focus is very much on creating a flexible and adaptive regulatory system in the UK to encourage innovation and growth. The Report also hints at some specific areas of onshored EU legislation that the government may target for change in the near term.

This annual publication outlines some of the primary focus areas in 2021 for UK-regulated financial services firms. Some of these topics are attracting attention because they are an emerging trend, or because they are at a key stage in the implementation cycle. Other topics are longstanding, but remain at the top of the PRA’s and FCA’s priority lists.

While this publication looks beyond Brexit and COVID-19, inevitably, in the short term, these issues continue to be dominant themes.

We hope

Three delegated acts that supplement the EU Benchmarks Regulation will come into force on 23 December 2020.

By Nicola Higgs, Becky Critchley, Ella McGinn, and Anna Lewis-Martinez

The long-awaited delegated acts (Delegated Acts) required by Regulation (EU) 2019/2089 (the Low Carbon Benchmarks Regulation), which amends the EU Benchmarks Regulation (BMR), have been published in the Official Journal of the European Union (OJ). The Delegated Acts will enter into force on 23 December 2020, 20 days after their publication on 3 December 2020. No substantial changes have been made to the official texts since the Commission adopted the Delegated Acts on 17 July 2020.

The Delegated Acts set out (i) sustainability criteria in order for a benchmark to qualify as an EU Climate Transition Benchmark or EU Paris-aligned Benchmark, and (ii) the environmental, social, and governance (ESG) disclosure requirements for benchmarks provided in accordance with the BMR.

FCA’s Stephen Hanks discusses onshoring and how to ensure regulatory compliance before the year’s end.

With the end of the Brexit transition period looming, many financial services firms are asking what they need to do between now and the end of the year to ensure regulatory compliance.

In this episode of Connected With Latham, Anne Mainwaring, London associate in the Financial Regulatory Practice, joins Stephen Hanks, Manager in the Markets Policy Department at the UK’s Financial Conduct Authority,