HM Treasury has published a policy paper setting out the next steps to its approach on regulation and regulators. The three overarching actions are: (i) tackling complexity and the burden of regulation; (ii) reducing uncertainty across the regulatory system; and (iii) challenging and shifting excessive risk aversion in the system. While the paper covers a range of sectors, in the context of financial services, specific actions include plans already announced, such as consolidating the payment systems regulator with the Financial Conduct Authority (FCA). It also builds upon the announcements of the Chancellor at Mansion House, including the drive to modernise the FCA's rules for dispute resolution with plans to examine whether the Financial Ombudsman Service (FOS) is delivering its role as a simple, impartial dispute resolution service set up in a way which works well for consumers, small businesses and for financial services firms. This review of the FOS is expected to conclude by the summer.
Additionally, HMT will work with the regulators, the Office for Investment and the City of London Corporation, and the government will establish a concierge service that enhances the attractiveness of the UK as a destination for global financial services by making it easier for firms to navigate the UK regulatory landscape and broader barriers to entry. A package of measures to enable the FCA to support early-stage innovative firms to start conducting regulated activities, including more dedicated support, issuing 'minded to approve' notices to support fundraising, and considering whether we can update the legislative framework to allow relevant firms to conduct limited regulated activities with streamlined conditions is also planned. The paper also includes a range of pledges from regulators to support the effort, and the FCA and the Prudential Regulation Authority make a number of pledges in Annex A.
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