EY comment on the 2022 UK Financial Services and Markets Bill

Andrew Pilgrim, UK Financial Services Partner at EY, comments: “The new Chancellor has set the foundations for how UK financial services will operate in a post-EU world, with a focus on driving innovation, growth and the UK’s role as an international centre.

“Although legislation to enact the changes is unlikely to receive Royal Assent until next year, the publication of the Bill shows us where we are heading. 

“The Bill covers an enormous amount of ground. Most prominent is the repealing of retained EU law and the creation of a regulatory framework that gives UK authorities new powers, secondary competitiveness and growth objectives, a net zero regulatory principle, and potentially incurs greater scrutiny and direction from Government and Parliament.

“The Bill also provides greater clarity on the treatment of new and emerging areas of financial services and related risks. These include the regulation of stablecoins as a means of payment and critical third-party service providers. Without compromising standards, the City of London and the wider UK financial services industry must continue to modernise if it is to remain internationally competitive.

“The industry’s regulatory authorities are right to remain vigilant about forms of systemic and conduct risk, but at the same time the City must ensure that it does not drop the ball on supporting new growth and championing innovation. Overall, the UK needs to ensure it does not fall behind other global financial centres, particularly New York, Paris, and Amsterdam, which are already pushing ahead with reform agendas.

“Firms must take advantage of the reforms as the UK seeks to remain a competitive and high standard jurisdiction.”