The Queen’s speech included the Financial Services (FS) Bill, intended to ensure that the UK maintains its ‘world-leading regulatory standards’ and remains open to international markets after Brexit. This Bill replaces the FS Bill which was dropped as a result of the prorogation of Parliament in October 2019. Ian Mason, head of UK FS regulation and joint head of UK FS sector at Gowling WLG, and Richard Flenley, senior associate at Charles Russell Speechlys LLP, discuss the impact the FS Bill would have on the FS, property and trading markets.
The main elements of the FS Bill include:
- simplifying the process which allows overseas investment funds to be sold in the UK to protect the UK’s position as a centre of asset management and provide more choice to UK consumers, in line with commitments made during preparations for leaving the EU
- implementing the Basel standards to strengthen the regulation of global banks, in line with previous G20 commitments
- delivering the government’s commitment for long-term market access to the UK for financial services firms in Gibraltar
The main benefits of the FS Bill would be:
- supporting the UK’s position as an international financial services centre
- enhancing the competitiveness of the UK’s financial services sector, while maintaining high standards to protect UK consumers so that they can use financial services’ products with confidence
- the government will set out further measures to ensure the UK maintains its world-leading regulatory standards and remains open to international markets after we leave the EU in due course
The Bill’s provisions would extend and apply to the whole of the UK.
Mason explains that the FS Bill will make provisions to avoid the UK’s position as a leading financial centre being threatened by the immediate loss of the passport regime in a no-deal Brexit: ‘The proposals in the FS Bill are intended to bolster and preserve the UK's position as a leading financial centre. In the event of a "no deal Brexit", there would be an immediate loss of the passporting regime, which enables overseas firms to market and provide their services in the UK without needing to be re-authorised by the UK regulator, the Financial Conduct Authority, and the FS Bill is aimed in particular at helping the important asset management sector.’
‘There is also a big boost for Gibraltar's expanding FS sector. The other proposals are intended to strengthen global capital standards in banks, which are part of the continuing response to avoid another financial crisis, similar to 2008.’
Flenley acknowledges the boost the Bill could be to the UK property market: ‘The financial services industry underpins much of the UK property landscape and many property owners, investors and occupiers will be concerned to make sure that the financial services industry remains prominent internationally. The new FS Bill seeks to do just that […] If the legislation passes Parliament scrutiny it will be vital to see whether or not these laudable aims are met. Time will tell.’
Originally published on LexisLibrary and LexisPSL