I wanted to update constituents on our important Financial Services Act, which has gained Royal Assent today and is now law, as an Act of Parliament. This Act will ensure the UK’s regulatory framework continues to function effectively for the UK after leaving the EU. It is a vital first step in taking responsibility for our financial services regulation, ensuring the UK maintains the highest regulatory standards and remains an open and dynamic global financial centre.
This legislation lays foundations for the enhancement of the UK’s world-leading prudential standards and will promote financial stability following the COVID-19 pandemic and will ensure the UK retains the high degree of openness it has with international markets. It is also essential the UK maintains an effective financial services regulatory framework and supports its sound capital markets, as is the aim of this legislation.
This Act is designed to deal with the most immediate issues for the UK financial services regulatory framework after the Transition Period, and forms part of a wider reform agenda, and the Financial Conduct Authority has welcomed the Financial Services Act, which it says will help to maintain high standards and provide greater clarity to firms, including provisions to amend the Benchmarks Regulation, which will help manage and direct an orderly wind-down of critical benchmarks such as LIBOR.
As you all know, the financial services sector plays a crucial role in supporting the UK economy, creating jobs across the UK, supporting SMEs, contributing taxes, driving regional growth and investment, tackling climate change and embracing technology and innovation. The future success and competitiveness of our Financial Services sector will be underpinned by a world-class environment for doing business.
This Act simplifies the process through which overseas investment funds are marketed in the UK, to maintain the UK’s position as a global centre for asset management and provide more choice to UK consumers.
My colleague, the Economic Secretary to the Treasury, John Glen MP, had the following to say on the Act during the debate in the House of Commons earlier this week, before it received Royal Assent:
“As our first major piece of financial services legislation since leaving the EU, the Bill will enhance the UK’s world-leading prudential standards, protect financial stability, promote openness between the UK and international markets and maintain an effective financial services regulatory framework and sound capital markets.
“I believe that this Bill is a key component of a new, broader regulatory strategy that will underpin the UK financial services sector as a genuine world leader now that we have left the European Union.”
To read the full debate, and the Government’s stance on the various proposed amendments, please visit: Financial Services Bill - Monday 26 April 2021 - Hansard - UK Parliament