Financial Services & Markets Bill: A new beginning? UK financial services in a post-Brexit world

22/07/2022

On 20 July 2022, the Financial Services and Markets Bill (the Bill) was introduced into Parliament. The Bill is the largest piece of financial services legislation for over two decades and covers a wide range of topics. However, it contains very few surprises because all of its main proposals have been anticipated for some time. What are the ‘big ticket items’ in the Bill? (1) Future Regulatory Framework: The main driver for the Bill was to sort out the mess left on the statute book by the mass-onshoring of EU legislation in the lead up to Brexit. The Bill establishes HMT’s Future Regulatory Framework, giving the FCA and PRA new powers and objectives and providing the legislative architecture for the repeal of EU retained law and its transfer to the FCA and PRA rulebooks. Retained EU law When the UK left the EU, the body of EU legislation that applied directly in the UK at the point of exit was transferred onto the UK statute book by the EU Withdrawal Act and became known as ‘retained EU law’. This approach was just a quick fix to ensure the UK legislation worked in the immediate period after Brexit and was never meant to be a long-term solution, particularly because, under this structure, the PRA and FCA are unable to make changes to rules set out in retained EU law. The Bill sets up the legislative architecture to allow a smooth transition to a comprehensive FSMA model. The regulators will make and consult on rules in the usual ...