Enhancing Financial Services Bill Announced In King's Speech

The UK government has announced an Enhancing Financial Services Bill in the King's Speech. 

The government says that the financial services regulatory framework has grown significantly over time. Feedback has indicated that the complexity of the UK regulatory environment is detracting from the UK's overall attractiveness, with businesses feeling that it is more complex and burdensome to be regulated as a financial services firm in the UK than in other countries.

Consequently, the Bill will aim to modernise how the financial services sector is regulated, enable it to grow and to lend more to businesses, and update consumer protection for the digital age. At the same time, it will maintain high standards of regulation and oversight.

What will the Bill do? 

The government says that the Bill will: 

• Modernise consumer protections and redress arrangements to reflect today's markets and maintain confidence. It will aim to make sure that consumers are appropriately protected when something goes wrong, making sure protections are fit for the digital age. Reforms to the Financial Ombudsman Service will increase consistency and clarity of decision-making, helping people resolve disputes more quickly and with greater certainty.
• Consolidate the regulatory framework to enable stronger coordination and clearer responsibilities, reduce fragmentation of the regulators and support innovation. By streamlining the regulatory architecture and consolidating the Payment Systems Regulator within the Financial Conduct Authority, firms will deal with fewer overlapping regulators, providing clearer accountability and faster decision-making.
• Ensure that the administrative burden on firms is proportionate without compromising on core consumer, prudential and market protections. This includes reducing the overall burden of the Senior Managers and Certification Regime by 50% with a focus on accountability of the most senior figures in financial services; with the aim of freeing up firms to focus on serving customers and invest in growth, rather than dealing with overly burdensome compliance processes.
• Enable credit unions to expand by improving the rules on who can become a member. This is aimed at allowing credit unions to serve more people and communities, widening access to affordable finance and supporting the government's aim to double the size of the mutual and co-operative sector.
• Support lending and investment including by updating the statutory framework underpinning the ring-fencing regime, which requires major banks to separate their UK retail banking services from investment banking activities. This aims to provide more finance for UK businesses, especially to help small businesses access finance. 

We await the draft Bill and will report when it is introduced to parliament.

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