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Financial services is one of the UK’s most vibrant, innovative and important
industries. As Economic Secretary, my role is to deliver on the government’s vision
for an open, green, and technologically advanced financial services sector. A sector
that is globally competitive and acts in the interests of communities and citizens,
creating jobs, supporting businesses and powering growth across the UK.
The UK’s leadership and innovation in financial services goes back over 400 years:
the first paper banknotes, the first regulated stock exchange, and even the first
ATM. And following the global financial crisis in 2008, the UK was instrumental in
driving the reforms to improve the global financial system and has demonstrated an
ongoing commitment to high regulatory standards.
Taking advantage of the UK’s new freedoms now we have left the EU, the
government wants to build upon our historic strengths to renew the UK’s position
as the world’s pre-eminent financial centre.
The Future Regulatory Framework (FRF) Review will therefore play a critical role in
delivering the vision for the sector set out by the Chancellor in his speech at
Mansion House in July 2021. The FRF Review provides a once-in-a-generation
opportunity to ensure that, having left the EU, the government maintains a
coherent, agile, and internationally-respected approach to financial services
regulation that is right for the UK.
The previous consultation on the FRF Review, issued in October 2020, received over
120 responses and has been the subject of significant engagement with
stakeholders over the last 12 months. I am extremely grateful to everyone who
engaged with the previous consultation, and would like to thank Parliamentary
colleagues, market participants, consumer groups and other interested stakeholders
for their enthusiastic response.
This consultation builds on the previous one, sets out the government’s proposals
for important changes to the UK’s financial services regulatory framework, and seeks
to build on the strengths of the UK’s existing model of regulation established by the
Financial Services and Markets Act 2000 (FSMA). The proposals include changes to
the regulators’ statutory objectives and enhanced mechanisms for accountability,
scrutiny and oversight of the regulators by Parliament, HM Treasury and
stakeholders. It also sets out how we intend to return responsibility for designing
and implementing regulatory requirements to the UK regulators, a break from the
approach under EU law.