The Financial Conduct Authority is working on what a financial services rulebook outside of the EU will look like.
In an update on its site, Greg Sachrajda, co-director, cross-cutting policy and strategy, supervision, policy and competition at the FCA said the passage of the Financial Services and Markets Act 2023 brings “a great opportunity”.
He said the FCA and other regulators have been given the ability to refine and expand what the rulebook will look like as a result of this act.
The 2023 act puts in place an enhanced framework, including a new secondary objective on international competitiveness and growth, and new accountability and scrutiny arrangements such as an enhanced duty to keep rules under review.
The FCA is also already consulting on this and a new duty to consult a panel on its preparation of cost benefit analyses.
Sachrajda said: “The 2023 Act also allows the repeal of the 'retained EU legislation' (REUL) in financial services that the UK inherited.
“This means that we can now write new rules more suitable for UK markets and consumers.
“But we're not simply going to rip everything up and start again. There will be some areas that will require changes because we know they're not working well for the UK, and we're excited about bringing forward changes to make those parts of our markets work better.”
A joint approach
Sachrajda said multiple teams have been thinking about what is working, and what isn’t, and where the regulator may be able to adapt.
It has been working closely with the Treasury and the Prudential Regulation Authority to plan for a smooth transfer, and collectively it needs to deliver a government statute book, a PRA Rulebook and a FCA Handbook that all support and interface well with each other.
“Now more than ever, we're committed to excellent engagement with our stakeholders, not least financial services firms and the consumers they serve, to ensure meaningful involvement and consultation on the changes we propose,” he said.
“You’ll see us engaging earlier, through a whole range of channels, both formal and informal, to seek to get your views, to ensure we make the right decisions for the UK."
In addition, to help ensure consistency and drive good outcomes, he said the FCA wants to ensure that our handbook is clear and accessible.
The overall aims for the handbook are to: have clear rules, reduce regulatory burdens where appropriate, and enhance accessibility.
To achieve this, it will be applying the following principles:
- bringing together regulatory provisions so that the handbook becomes a 'one-stop shop'
- using the existing structures in the handbook where possible, and only creating new sourcebooks where necessary
- relying on existing requirements as much as possible
- considering outcomes-based regulation, where appropriate
- seeking to reduce complexity by drafting in our Handbook format and style where we can, and aiming to align standards addressing similar issues across files where possible
Welcome news
Priti Verma, chief risk officer at Quilter, said: “While some detail of the financial services act has been communicated via the Edinburgh reforms, much remains on the table and it is not completely clear how comprehensive this ‘rewiring’ of UK financial services will be post-Brexit, but it does feel genuinely consultative.
