The Edinburgh Reforms intend to drive forward the UK Government’s vision for the financial services industry In this blogpost, we look at two main parts of this vision and explain how Surety can help you track, analyse, assess and report against these emerging requirements.
A competitive marketplace promoting effective use of capital
Future Regulatory Framework
The Future Regulatory Framework (FRF) Review was established to determine how the UK financial services regulatory framework should work outside of the EU. The outcomes of the FRF Review resulted in the 2022/2023 Financial Services and Markets Bill. The Bill establishes the regulatory framework primarily on the basis of FSMA, replacing sections of the rulebook drawn from EU rules.
Ring-fencing Regime for banks
HM Government confirmed an intention to consult in mid-2023 on a number of changes to the existing ring-fencing regime:
Changing the threshold of retail deposits that brings a bank in scope of the rules from £25b to £35b;
removing banking groups without major investment banking operations;
refining the definition of Relevant Financial Institution; and
removing blanket geographical restrictions on ring-fenced banks operating subsidiaries or servicing clients outside the EEA.
Wholesale Markets Review: MIFID
Reporting: HM Government has published the Markets in Financial Instruments (Investor Reporting) (Amendment) Regulations 2022 (SI 2022/1297). The Regulations relax certain requirements for reporting to investors.
Commodities: HM Government will look to lighten burdens for firms trading commodities derivatives as an ancillary activity.
Consolidated tape: HM Government plans to work with the FCA on having a regulatory regime in place by 2024 to support a consolidated tape for market data
Investment research: HM Government will launch an independent review of investment research and its contribution to UK capital markets competitiveness.
Call for evidence on Short Selling Regulation
HM Government plans to repeal the Short Selling Regulation, and a call for evidence is the first step towards replacing retained EU law with a regulatory framework specific to the UK. The Government will consider which aspects of the regime should remain in legislation and which should be delegated to the FCA to set in its rules.
Consultation on PRIIPs and UK Retail
HM Government is consulting on the repeal of PRIIPs Regulation and is seeking views on a proposed alternative framework for retail disclosure.
HM Government and regulators began a review of the Senior Managers & Certification Regime in Q1 2023. The Government will publish a call for evidence to look at the legislative framework, and the FCA and PRA will review the existing regulatory framework.
The Government will publish an updated Green Finance Strategy early 2023 and consult in Q1 2023 on bringing ESG ratings providers into the regulatory perimeter.
How can Surety help?
Managing the compliance obligations associated with regulatory change such as the Edinburgh Reforms can be complex. The regulators expect documented, tested and evidenced controls to be in place, ensuring the risks associated with your business are understood and managed effectively. Compliance staff at regulated firms are often swamped with policies and procedures, risk reporting, horizon scanning, as well as the business data and management information required to do their jobs.
Surety simplifies this by becoming your central compliance brain. Our platform gives you the ability to align and assign your controls to the regulations that apply to you, and easily evidence that fact to your regulators! Spot your regulatory overlaps and underlaps, report to stakeholders and drive forward change projects by being fully informed.
When implementing regulatory change projects or assessing your impacts or exposures from new/changing regulation, Surety gives you the evidence and the insights to succeed.