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3to2 - 10 Key Focus Areas For Financial Services Firms 2025_alev-takil-7ojyp-IXW7w-unsplash_50034

In this publication and podcast series, we explore some of the core focus areas for UK-regulated financial services firms in the year ahead.

In 2024, we saw disruption to the regulatory reform agenda as the unexpected timing of the general election impacted work and publication schedules. Now that the reform agenda is back on track and aligned to the new government’s plans for growth, we are likely to see improved progress on existing reforms as well as fresh initiatives in the pursuit of growth during 2025.

There is doubtless a strong focus on retail markets under the new government, but the UK’s competitiveness as a place to do business remains vital as improvements to the UK’s wholesale markets continue. ESG and AI continue to dominate across the sector as rapidly evolving areas that profoundly impact the regulatory landscape.

Big Ben London England by Night

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.

Read the full report.

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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…

display stock market numbers with defocused street lights background

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).

Modern building facade

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.

magnifying glass on the book

Regulator finds that firms could improve how they conduct anti-money laundering checks when dealing with UK PEPs.

By Rob Moulton, Nicola Higgs, Jonathan Ritson-Candler, and Charlotte Collins

On 18 July 2024, the FCA published feedback from its multi-firm review on the treatment of politically exposed persons (PEPs), along with a Guidance Consultation (GC24/4) proposing targeted amendments to its guidance on the treatment of PEPs.

Following concerns from UK PEPs in recent years that financial services…

Cloudless day at financial district of London

UK Chancellor launches consultation on the proposed Private Intermittent Securities and Capital Exchange System (PISCES) as part of the Spring Budget.

By Mark Austin, Rob Moulton, Anna Ngo, Frederick Gardner, Charlotte Collins, and Johannes Poon

On 6 March 2024, HM Treasury published a consultation paper seeking industry feedback on the UK’s proposed new regulated crossover market, the Private Intermittent Securities and Capital Exchange System (PISCES). PISCES would allow private companies to trade their securities in…

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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…

Cloudless day at financial district of London

Businesses relying on exemptions for high net worth individuals and self-certified sophisticated investors should ensure they are prepared to comply with the updated requirements.

By Rob Moulton, Nicola Higgs, and Charlotte Collins

On 7 November 2023, HM Treasury published the response to its consultation on reforming the financial promotion exemptions for high net worth individuals and self-certified sophisticated investors. These exemptions are set out in Articles 48 and 50A of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the FPO), respectively. They enable financial promotions for unlisted companies to be made to individuals who satisfy the relevant conditions, and were originally designed to assist unlisted companies with raising capital.

HM Treasury and the FCA are concerned that the exemptions, which have not been updated since 2005, are outdated as the financial thresholds have not been raised. This has meant that more individuals have been able to qualify for the exemptions. HM Treasury and the FCA have also been concerned that some businesses have been inappropriately using the exemptions to market investments to ordinary retail investors, including by coaching individuals to self-certify.

Government plans to add more flexibility to the regime, but its long-term future remains undecided.

By Rob Moulton and Charlotte Collins

On 28 September 2023, HM Treasury published further papers in relation to the planned reform of the UK bank ring-fencing regime, which was announced as part of the Edinburgh Reforms (see this Latham article). The ring-fencing regime requires banks over a certain size threshold to separate out their retail deposit-taking operations into a ring-fenced entity.

HM Treasury has published a consultation on short-term reforms to the regime, aiming to implement (and, in some cases, go beyond) recommendations made in 2022 by the independent review of ring-fencing. The proposed reforms include raising the ring-fencing threshold from £25 billion to £35 billion of core deposits, and expanding the activities that a ring-fenced bank may carry on. HM Treasury has also published a response to its Call for Evidence on aligning the ring-fencing and resolution regimes in the longer term.