Innovate Finance response to package of financial services regulatory reforms announced by the Chancellor of the exchequer
Welcoming a package of financial services regulatory reforms announced by the Chancellor of the exchequer in Edinburgh today (9th December 2022), Janine Hirt, CEO of Innovate Finance, said:
“These reforms continue to maintain UK competitiveness as a leading global centre for innovation in financial services. They should further enhance the UK as a positive investment environment with increasing growth capital for FinTechs, as a leading centre for digital assets and as a regulatory regime that supports innovation. Alongside this, we will want to ensure that other reforms to financial regulation, especially banking rules, continue to support the growth of innovators and challengers who have flourished over the last decade. We look forward to working with industry, government and regulators on these reforms in support of the shared vision for the UK to be the leading centre for green and digital finance.”
“There are a number of measures which our work on the investment landscape has shown will further strengthen the positive investment environment in the UK. In particular, the independent review of investment research, including reform of MiFID ‘unbundling’ rules, provides the basis to grow a strong analyst capability in the UK that can identify the investment growth opportunities of UK innovators. There is further progress on reform of prospectuses, implementation of the secondary capital markets review and reform of the pensions regulatory charge cap. The FinTech ecosystem will also be very interested in the proposals for trialling a new class of wholesale market venue which would operate on an intermittent trading basis.
“In terms of supporting innovation, we welcome continued commitment to making the UK a leading centre for digital assets - expanding the Investment Manager Exemption to include crypto assets - an upcoming report on a UK Central Bank Digital Currency and consideration by the new Accelerated Settlement task force of ‘T+0’ settlement using distributed ledger technology. It is great to see that the Chancellor’s remit letter to the FCA today includes specific reference to actively embracing the use of new technology in financial services, including crypto technologies and AI. Although not mentioned, we hope the Government will still be consulting shortly on a framework for regulating crypto asset services, to provide the basis for successful innovation through essential consumer and market protections and a level playing field for responsible firms.
"FinTechs play a significant role in bringing new services and enhanced experiences to customers, widening access to finance and financial management. We are therefore delighted to see the launch of a consultation on reform of the 1974 Consumer Credit Act, which should provide the basis for new consumer protection rules that support innovation and deliver much better outcomes for consumers. The package also contains a range of measures designed to provide a more proportionate regime for UK banks. It will be important to ensure that the detailed implementation of these continues to support the competitiveness of the UK’s burgeoning ‘challenger banks’ who have built innovative and trusted services since the financial crash.
"We look forward to the publication of the Government’s Green Finance strategy next year, in which FinTechs have a central role to play as tackling climate change increasingly depends upon the application of data to direct finance to Net Zero outcomes.”