When the Edinburgh Reforms were announced on 9 December 2022, they were billed as an ambitious set of reforms. Two years on, we assess which of the measures have been completed, which remain outstanding, and whether they have delivered on the agenda set out.
We also reflect on the recent Mansion House announcements, which have reset the future of regulatory reform.
The regulator has significantly rowed back on aspects of the proposals following industry and government feedback.
By Andrea Monks, Rob Moulton, Nell Perks, Anna James, and Charlotte Collins
On 28 November 2024, the FCA published revised proposals for announcing enforcement investigations. The original consultation, launched in February 2024, proved to be one of the most controversial proposals put forward by the regulator and received an unprecedented response from industry and the government (for more detail on the original proposals, see this Latham blog post). The FCA has attracted a great deal of criticism since the launch of the first consultation, culminating in an evidence session before the House of Lords Financial Regulation Committee a few weeks ago, which made for uncomfortable viewing.
In light of the feedback received, the FCA has made some significant changes to its proposals, and acknowledges that it ought to have handled their communication better by signalling the proposals to the market in advance of their publication. The regulator also acknowledges the importance of considerations around its secondary objective relating to international competitiveness and growth in relation to these proposals.
The survey finds that most firms are using AI, but many only have a partial understanding of how the technology operates.
By Becky Critchley and Gary Whitehead
On 21 November 2024, the Bank of England (BoE) and FCA published a report setting out their findings from the AI and Machine Learning Survey 2024. In the context of the rapid adoption and integration of AI technologies across financial services, the regulators are keen to understand the opportunities and challenges that market
Proposals reflect drive to enhance the competitiveness of the UK regulatory landscape.
By Rob Moulton, Kendall Burnett, Sarah Gadd, Charlie Bowden, and Charlotte Collins
On 26 November 2024, the PRA and the FCA published a joint Consultation Paper on changes to the remuneration rules (PRA CP16/24, FCA CP24/24). The changes are relevant to banks, building societies, and PRA-designated investment firms.
While the amendments to the rules on deferrals and retention had been previewed by both the
IT teams will want to contribute to the debate over the FCA’s proposed changes, which could introduce additional complexities and lead to major IT costs for firms.
By Rob Moulton and Becky Critchley
On 15 November 2024, the FCA issued a Discussion Paper on improving the UK transaction reporting regime (DP24/2). The FCA receives seven billion transaction reports a year on 20 million different reportable financial instruments, and firms find submitting such reports accurately a difficult, costly, and
The new regime will take effect on 1 January 2025, but will not diminish the responsibilities of financial services firms relying on the services of critical third parties.
By Rob Moulton, Fiona Maclean, Alain Traill, and Charlotte Collins
On 12 November 2024, the PRA, FCA, and Bank of England jointly published a Policy Statement (PRA PS16/24 and FCA PS24/16), setting out their final rules for critical third parties (CTPs). The regulators consulted on this framework in December
The regime will have broad reach, although its implementation will likely take several years.
By Nicola Higgs, Rob Moulton, Becky Critchley, and Charlotte Collins
On 14 November 2024, HM Treasury laid out the future UK regulatory regime for environmental, social, and governance (ESG) ratings providers. It previously consulted on proposals for the new regime in spring 2023 (see this Latham blog post).
HM Treasury has now confirmed:
“With the global ESG market predicted to surpass $40
The world’s first regulated private/public crossover market is significantly redesigned as a friction-free “private up” rather than “public down” market with rethought approach to disclosure and market abuse.
By Mark Austin, Chris Horton, James Inness, Anna Ngo, Frederick Gardner, and Johannes Poon
On 14 November 2024, the UK government published its response to the March 2024 consultation on the UK’s proposed new regulated private/public crossover market, the Private Intermittent Securities and Capital Exchange System (PISCES).
The UK Chancellor announces a growth-focused agenda for financial services.
By Rob Moulton, Nicola Higgs, Becky Critchley, and Charlotte Collins
On 14 November 2024, the new Chancellor of the Exchequer, Rachel Reeves, delivered her first Mansion House speech. She used her speech as an opportunity to announce reforms designed to drive growth and competitiveness in financial services, stating that many of the regulatory changes introduced to eliminate risk after the financial crisis had “gone too far” and led to unintended consequences. Although she did not announce a swathe of deregulatory measures, this speech sets the tone for how the government will likely approach regulation in the financial services sector going forward.
The data provides important insights to assist firms with their ongoing work in this area.
By Rob Moulton, Nicola Higgs, Nell Perks, Becky Critchley, and Charlotte Collins
On 25 October 2024, the FCA published the results of a survey on non-financial misconduct it undertook earlier in the year involving over 1,000 firms in the wholesale sector (investment banks, brokers, and wholesale insurance firms). This was the first time the FCA has looked in detail at how