techUK | Financial Services and Markets Bill | How will it affect you?

• The Bill covers includes areas such as operational resilience of tech firms, sandboxes, crypto and international competitiveness
• Opportunity for members to contribute to techUK’s efforts in shaping this law

techUK’s Financial Services Programme are calling on members for their thoughts on the UK Government’s Financial Services and Markets Bill which will help shape the draft laws being proposed.

The Bill covers areas including advancing cross-regulatory corporation, new rules for some tech firms who provide services to the sector, developing further regulatory sandboxes to promote innovation, new specific regulations for cryptocurrency and developing an international competitiveness objective for regulators.

To assist members in providing their thoughts, we will be capturing comments in themes using a short survey – rather than ask them to read the 335 pages of the Bill. 
 

Details of the Bill

The Financial Services and Markets Bill (FSMB) seeks to define the sector’s post-Brexit regulatory framework, including numerous changes to how both financial institutions and firms use technology and data. From a perspective of financial-technology policy-making the proposals can be summed-up in four key areas:
 

1. Changes to regulatory relations between regulatory/financial institutions, firm and ‘critical’ third parties within tackling systemic/firm specific operational resilience challenges

Following the release of the Bank of England’s Prudential Regulation Authority (PRA) and Financial Conduct Authority’s (FCA) DP3/22 Discussion Paper, the Bill proposes significant changes bringing oversight of both financial institutions and firms usage of ‘critical’ third party providers – services which some techUK members provide.
 

2. HM Treasury’s powers in formulating Financial Market Infrastructure (FMI) sandboxes within the task of ‘testing’ various regulatory environments

FMIs will have the capability to apply/remove various regulatory policies within the task of understanding at better lengths, the impact various pieces of legislation have on challenges and developments [1]within the sector. This will bring a particular focus on the development and application of distributed ledger technologies.
 

3. Expanded coordination between regulatory institutions to improve technology use across the sector, tackle threats of systemic crisis and open regulatory space for digital currencies including stablecoin

Following the revocation of EU law within the sector, numerous changes are proposed within cross-regulatory institutional relations, including between UK, international and other countries’ institutions. As such, these changes seek to further modernise the sector, laying the groundwork for financial institutions, firms, and relevant third-party providers to formulate long-term strategies to develop key areas of focus including operational resilience’s crisis prevention tools and regulatory oversight between authorised and unathorised financial firms.
 

4. Secondary objective for regulators

The Bill also allows a secondary objective to be created for the PRA and FCA; giving them a remit to consider international competitiveness. This has not been present since before the two organisations were created but an important consideration in an increasingly connected world where the UK is a leader in both financial services and FinTech.

Call for Comments Process

As part of the Public Bill Committee’s review process, techUK is looking to collate the opinions and ideas of its members within the financial-technology space.

Please see attached form below, including relevant questions and details of submission. 

techUK _ Financial Services and Markets Bill _ Call for Comments _ Form.docx 1

Key dates:

• 4 October – 14 October, techUK members read, review and input feedback into the team’s Call for Comments form.
   
• 14 October – 18 October, techUK team to review all member feedback, formulating these into a feedback report which will be sent to the Public Bill Committee prior to the deadline.
   
• techUK will examine closely the developing landscape of the Bill, including changes made across the passage process and report back to members the positions taken and rationale based on member feedback.
   

Please ensure all completed forms are sent to [email protected], with organisation details included.  

We look forward to receiving input from our members on this important piece of legislation, please contact the team below for any questions, initial comments, and ideas you may have regarding the Call for Comments process. 

Andy Thornley

Head of Financial Services, techUK

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Andy Thornley

Head of Financial Services, techUK

Andy joined techUK in August 2022 as Head of Programme – Financial Services. His role includes leading techUK’s work in building a greater understanding of the 'technological art of the possible' in order to apply it to the reform and evolution of financial systems.

Before joining techUK, Andy worked for a number of other bodies in the financial services sector, including the British Insurance Brokers’ Association, where in addition to owning policy and public affairs, he was also responsible for fostering InsurTech in the sector.

Andy has a degree in Human Biology and holds a Certificate in Insurance (Cert CII) qualification from the Chartered Insurance Institute. Outside of work, Andy is an avid cyclist and races competitively both on the road as well as the velodrome.

Email:

[email protected]

Twitter:

@AndrewThornley

LinkedIn:

https://www.linkedin.com/in/mr-andy-thornley/

 

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[1] Including digital currency.