Edinburgh Reforms: Chancellor announces transformation for UK Financial Services

Edinburgh Reforms: Chancellor announces transformation for UK Financial Services

Underlining financial services as one of the UKs five key growth areas, the Chancellor of the Exchequer, Jeremy Hunt, announced the Edinburgh Reforms on 9 December 2022 – a package of over 30 regulatory reforms set out in a bid to ‘unlock investment’ and ‘turbocharge’ economic growth in towns and cities across the UK. This package of reforms will outline how the UK government intend to ‘review, repeal and replace’ a range of rules that were previously introduced to protect savers and taxpayers after the 2008 financial crisis.

In the push towards net zero, the Chancellor announced plans to prioritise sustainable investment and as part of the reforms, the UK government is also planning to update the Green Finance Strategy in 2023, aiming to bring ESG rating under the radar of regulatory authorities.

Through the Financial Services and Markets Bill, which completed its remaining stages in the Commons on 7 December 2022, it is intended that a safe regulatory environment will be created for stablecoins, which could in time, be used for making payments. The announcement also confirmed the Financial Market Infrastructure Sandbox will be implemented in 2023 and that the Bank of England are considering the development of a UK Central Bank Digital Currency which could one day see British consumers using a ‘digital pound’.

The Chancellor of the Exchequer, Jeremy Hunt, says:

We are committed to securing the UK’s status as one of the most open, dynamic, and competitive financial services hubs in the world. The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses.

Among the new set of rules, the government has also confirmed it will look to loosen the ‘ring-fencing’ rules that mean banks must separate their investment banking and retail activities, releasing banks without major investment activity from the regime.

In addition, the government will also be mapping out new regulation in early 2023 to remove performance fees on pension regulatory charge caps and will continue to work with the Financial Conduct Authority (FCA) to produce further financial advice and guidance.

About our expert

John Pauley

John Pauley

Financial Services Partner
John is a specialist solicitor with extensive expertise in financial services regulation. He advises financial institutions, services providers, and merchants on regulated activities including payments, e-money, consumer credit, data protection, anti-money laundering, and gambling operations.

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