Anniversary of Edinburgh Reforms marks further success with improved financial advice

Friday, 8 December 2023 00:01

Proposals to help provide support to consumers with their financial decision-making to be the next step in Edinburgh reforms, as Economic Secretary Bim Afolami visits the city to mark a year since their launch. Building on the progress made this marks the delivery of the 22nd of the 31 reforms, with plans in place to deliver on the last nine reforms. The inaugural Scottish-London Financial Services Forum takes place as Minister also meets with Morgan...Request free trial

Building on the progress made this marks the delivery of the 22nd of the 31 reforms, with plans in place to deliver on the last nine reforms.

The inaugural Scottish-London Financial Services Forum takes place as Minister also meets with Morgan Stanley in Glasgow.

Economic Secretary to the Treasury Bim Afolami is today (8th December) announcing further changes to financial services as he marks the anniversary of the Edinburgh Reforms with a two-day trip to Scotland.

In the year since the launch of the Edinburgh reforms, the government has already delivered 22 of the 31 reforms including legislation which will overhaul the UK’s regulation of prospectuses, the information available to investors when a firm raises capital and bringing forward secondary legislation to take advantage of the UK’s newfound regulatory freedoms since leaving the EU through the implementation of the Wholesale Markets Review reforms. These changes mean the government is taking forward its ambition for the UK to be the world’s most innovative and competitive global financial centre.

Building on the reforms, the government and Financial Conduct Authority (FCA) has today published a policy paper as part of the joint Advice Guidance Boundary Review, outlining initial proposals for reform to help improve consumer access to support with financial decision making. Currently, there is an ‘advice gap’ between holistic financial advice that is unaffordable for many, and guidance that is free to access but not personal to the consumer. This excludes people with modest investments, leaving them without the tools necessary to reap the significant benefits offered by our world-leading financial services sector.

The government has also today published its response to the Call for Proposals, which sought views on the additional metrics that the FCA and the Prudential Regulation Authority should report against, as part of work to embed their new growth and competitiveness objectives. The regulators have agreed to publish a series of new metrics, which will support scrutiny of their work.

Economic Secretary to the Treasury, Bim Afolami today said:

“My number one priority in this role is to deliver on The Edinburgh Reforms. The reforms have shown the UK’s dedication to fostering a sensible, innovative and robust financial landscape – over the past year we've made significant strides towards creating an environment that supports economic growth, openness, and the well-being of savers.

“Already companies worldwide are taking note of the UK’s approach, and we will continue to deliver on our reforms as we make the UK the best place in the world to create and grow a business.”

Miles Celic, Chief Executive Officer, TheCityUK, said:

“The Edinburgh Reforms – and the subsequent Mansion House Reforms – were a positive signal of the government’s commitment to maintaining the UK’s competitiveness as a leading international financial centre. As we progress this important reform agenda, it is critical that government, industry and regulators work together to drive forward the implementation of the reforms and to deliver nationwide economic growth by bolstering the attractiveness of the UK as a place to list, invest, innovate and scale.”

The Minister also held a series of roundtables on asset management and fintech in Edinburgh and visited Morgan Stanley offices in Glasgow. Since 2000 Morgan Stanley’s office has grown from just six people to now employing more than 1,400 people. Edinburgh is currently the largest financial services hub in the UK outside of London, worth more than £14 billion to the UK economy and employing around 136,000 people.

Today is also the first Scottish-London FS forum – chaired by the Economic Secretary in Edinburgh – emphasising the government’s commitment to economic growth and the importance of the Scottish financial sector in supporting this.

At the recent Autumn Statement, the Chancellor announced further advancements in delivering on the Edinburgh Reforms and Mansion House commitments including ambitious steps to increase the flow of capital to promising growth companies while simultaneously improving outcomes for savers and measures to enhance the UK's financial services regulatory environment.

The trip is the Economic Secretary’s first trip to Scotland since his appointment, he said:

“Edinburgh is a key part of our financial services landscape, and it was really important to me to come and see some of the great work being done here within the first month of my appointment. Scotland is known for its innovation and ingenuity and I’m sure this will be the first of many such visits.”

Sandy Begbie CBE FRSE, Chief Executive, Scottish Financial Enterprise, said:

“We are delighted to welcome the Economic Secretary to the Treasury to Edinburgh for the launch our new UK Government forum - another important recognition of the vital contribution of Scotland’s financial services industry to the UK economy.

“The forum will be an opportunity to discuss our new sector growth strategy, which aims to harness our global leadership in areas like asset management, fintech, and green and sustainable finance, build on our strong foundations in banking, life and pensions and wealth, and unlock our expertise in data, AI and emerging technologies.

“It is also an opportunity to share our insights on the Edinburgh Reforms, a year since they were announced here. The reforms aim to build on the government’s vision for UK financial services to be an open, sustainable, and technologically advanced global centre that delivers for all parts of the UK and its communities.

“Our sector growth strategy is very much aligned with this vision and recognises the UK’s globally respected regulatory environment as an asset we must leverage to attract more investment and jobs to Scotland.”

ENDS

Contact Information

HMT Press Office
020 7270 5238
pressoffice@hmtreasury.gov.uk

Notes to editors

Notes to Editors

Updated Summary: Edinburgh Reforms Implementation

Commitment	Status	Planned completion date
A competitive marketplace promoting effective use of capital
Reforming the Ring-fencing Regime for Banks.	In progress The Government published a draft Statutory Instrument for consultation on 28 September on a package of reforms to improve the ring-fencing regime. The consultation closed on 26 November. Alongside that, the Government has undertaken a Call for Evidence on aligning the ring-fencing and resolution regimes in the longer term, which concluded on 7 May 2023. The Government published a summary of responses to the Call for Evidence on 28 September.	The Government intends to introduce the SI in early 2024. The Government intends to set out publicly a policy response to the Call for Evidence on aligning the ring-fencing and resolution regimes in the first half of 2024.
Issuing new remit letters for the PRA and FCA with clear, targeted recommendations on growth and international competitiveness.	Delivered The Government published the remit letters on 9 December 2022, alongside the Edinburgh Reforms announcement.	The Government has delivered this commitment.
Publishing the plan for repealing and reforming EU law using powers within FSMA 2023, building a smarter regulatory framework for the UK.	Delivered HMT published a Policy Statement and illustrative SI on 3 December 2022.	The Government has delivered this commitment.
Overhauling the UK’s regulation of prospectuses.	Delivered	The Government laid the final SI following the Autumn Statement on the 27 November 2023.
Reforming the Securitisation Regulation.	In progress The Government published an ‘illustrative draft SI’ on 9 December 2022 as part of the Edinburgh reforms and a near-final SI on 11 July 2023 alongside Mansion House. The PRA and FCA began consulting on securitisation reforms in late July and early August 2023 respectively, and these consultations closed in October 2023. The Government laid a first SI on 27 November 2023 after being announced at Autumn Statement. And the Government plans to lay a second SI in Q2 2024, which will make additional reforms and technical changes. These SIs and regulator rules are expected to be implemented in 2024.	The Government laid the first SI following the Autumn Statement 2023. A second SI, with additional reforms and technical changes, will be laid in Q2 2024 and the new regime will be implemented in 2024.
Repealing the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and consulting on a new direction for retail disclosure.	In Progress As part of the Mansion House package, on 10 July 2023, the Government published its response to its consultation which sought views on the government's plans to revoke the PRIIPs Regulation and a proposed alternative framework for retail disclosure.    The government published a draft SI which will deliver a new UK retail disclosure framework at Autumn Statement 2023.	The Government published a draft SI at Autumn Statement 2023 and will lay the final SI in 2024.
Intending to repeal EU legislation on the European Long-Term Investment Fund (ELTIF), reflecting that the new UK Long-Term Asset Fund (LTAF) provides a better fund structure for the UK market.	Delivered Commencement Regulations to repeal EU legislation on ELTIF were made on 10 July 2023 as part of the Mansion House package.	The Government has delivered this commitment.
Launching a Call for Evidence on reforming the Short Selling Regulation.	Delivered The Government published its Call for Evidence in December 2022, and its response on 11 July 2023, as part of the Mansion House package. The Government launched its subsequent consultation on aspects of the short selling regime related to sovereign debt and credit default swaps on 11 July 2023, as part of the Mansion House package. The government published its response at Autumn Statement 2023.	The Government has delivered this commitment. The Government published a draft SI and response to the follow-up consultation at Autumn Statement 2023. The Government plans to lay this SI in 2024, subject to Parliamentary time allowing. On 27 November 2023, the government also laid a separate SI to amend the notification threshold for reporting net short positions to the FCA, as announced at Mansion House.
Publishing a draft SI to demonstrate how the new powers being taken forward in the FSM Bill will be used to ensure that the FCA has sufficient rulemaking powers over its retained EU payments legislation.	Delivered The Government published the draft SI on 4 December 2022. The Government then laid the SI on 12 July 2023, as part of the Mansion House package.	The Government has delivered this commitment.
Consulting on removing burdensome customer information requirements set out in the Payment Accounts Regulations (PARs) 2015.	Delivered The Government published its consultation on 9 December 2022 as part of the Edinburgh Reforms. The consultation closed on 17 February 2023. The Government published its response on 11 July 2023, as part of the Mansion House package.	The Government laid a commencement order to repeal this REUL on 11 July.
Welcoming the PRA consultation on removing rules for the capital deduction of certain non-performing exposures held by banks.	Delivered The Government welcomed the PRA’s consultation alongside the Edinburgh Reforms.	The PRA published its final rules on 13 November 2021
Bringing forward secondary legislation to implement Wholesale Markets Review reforms.	Delivered The Markets in Financial Instruments (Investor Reporting) (Amendment) Regulations 2022 removes burdensome EU requirements related to reporting rules and was laid on 9 December 2022. The Financial Services and Markets Act 2000 (Commodity Derivatives and Emission Allowances) Order 2023 removes burdens for firms trading commodity derivatives as an ancillary activity. It was made on 17 May 2023.	The Government has delivered this commitment.
Establishing an Accelerated Settlement Taskforce.	Delivered The Government established the taskforce and appointed Charlie Geffen as chair. The Government has asked Charlie Geffen to publish his initial findings by December 2023, and to make recommendations by December 2024.	The Government has delivered this commitment.
Committing to establish the independent Investment Research Review.	Delivered Rachel Kent published the outcome of her review on 10 July 2023, making a series of recommendations to the government, FCA and industry.  At Mansion House, the Chancellor welcomed her report, and accepted all recommendations made to government.	The Government has delivered this commitment.
Commencing a review into reforming the Senior Managers & Certification Regime in Q1 2023.	Delivered The Government launched the Call for Evidence on 30 March 2023, alongside FCA/PRA joint discussion paper. The Government is currently assessing the responses alongside the regulators and will outline next steps in due course.	The Government has delivered this commitment.
Committing to having a regime for a UK consolidated tape in place by 2024.	Delivered On 27 November 2023, the Government laid the Data Reporting Services Regulation SI which will facilitate the emergence of a UK consolidated tape (CT). A consolidated tape will bring together market data from multiple platforms into one continuous feed.	The Government laid the Data Reporting Services Regulation SI on 27 November.
Consulting in early 2023 on issuing new guidance on Local Government Pension Scheme asset pooling.	Delivered The Government launched its consultation on 11 July 2023 as part of the Mansion House package. The consultation closed on 2 October 2023 and following analysis of responses, the Government published its response to the consultation on 22 November 2023, alongside Autumn Statement 2023. The consultation response confirms the proposal to set a March 2025 deadline for the transition of Local Government Pension Scheme assets into pools, sets a direction towards fewer asset pools exceeding £50bn in assets under management, and sets a 10% ambition for investments in private equity.	The Government has delivered this commitment.
Increasing the pace of consolidation in Defined Contribution pension schemes.	In progress The Government, FCA and the Pensions Regulator (TPR) published their consultation response on a new Value for Money (VfM) framework for DC schemes on 11 July 2023 after Mansion House. On 22 November 2023, alongside Autumn Statement 2023, the FCA and TPR announced next steps towards implementing the VfM framework. The FCA will consult on rules for contract-based schemes in Spring 2024, working closely with the government and TPR for consistency with the development of legislative requirements for trust-based schemes. In the meantime, actions from the TPR will strengthen their existing supervisory approach.	The VfM framework will require primary legislation to be fully implemented but the FCA will consult on rules for contract-based schemes in Spring 2024.
From April 2023, improving the tax rules for Real Estate Investment Trusts (REITs).	Delivered Legislated via Finance (No.2) Act 2023. The changes came into effect in April 2023.	The Government has delivered this commitment.
Announcing changes to the Building Societies Act 1986.	In progress The Government is continuing to progress drafting and laying of legislation to make the announced changes. Baroness Penn issued a Written Ministerial Statement on 21 September 2023 to notify Parliament of the need to use primary as well as secondary legislation to make the announced amendments to the Building Societies Act 1986. This will be taken forward when Parliamentary time allows.	The Government continues to progress the legislation and will set out updated timings in due course.
Delivering the outcomes of the Secondary Capital Raising Review.	In progress Mark Austin published the outcome of his review in July 2022, making a series of recommendations to the government, FCA and to industry. The Government has accepted all the recommendations addressed to it, including the establishment of a new independent Digitisation Taskforce, focusing on dematerialisation of paper share certificates, led by Sir Douglas Flint. Sir Douglas’ taskforce published an interim report alongside Mansion House on 10 July 2023. The FCA and the industry-led Pre-Emption Group have both also responded to the recommendations made to them in the SCRR. HMT laid the final Prospectus SI on 27 November, which will give the FCA power to take forward some of the recommendations for them.	The Government intends to deliver on the final remaining measures in the SCRR when parliamentary time allows.
Consulting on reform to the VAT treatment of fund management.	In progress The Government published its consultation on the VAT treatment of fund management response as part of the Edinburgh Reforms. We are currently drafting the summary of responses and will publish this in due course.	Summary of responses to be published in due course.
A world leader in sustainable finance
Publishing an updated Green Finance Strategy in early 2023.	Delivered The Government published the updated Green Finance Strategy on 30 March 2023.	The Government has delivered this commitment.
Consulting in Q1 2023 on bringing Environmental, Social, and Governance ratings providers into the regulatory perimeter.	Delivered The Government published this consultation on 30 March 2023. It closed on 30 June 2023.	The Government has delivered this commitment. Responses are being analysed and next steps will be set out in due course.
A sector at the forefront of technology and innovation
Consulting on a UK retail central bank digital currency alongside the Bank of England in the coming weeks.	Delivered The Government launched this consultation on 7 February 2023. It closed on 30 June 2023.	The Government has delivered this commitment. Responses are being analysed and next steps will be set out in due course.
Publishing a response to the consultation on expanding the Investment Manager Exemption to include cryptoassets.	Delivered The Government published its response to the consultation on 9 December 2022. The relevant HMRC regulations were made on 19 December 2022.	The Government has delivered this commitment.
Implementing a Digital Securities Sandbox in 2023.	In progress The Government launched its consultation on the first FMI Sandbox, the ‘Digital Securities Sandbox’ (DSS), on 11 July 2023. It closed 22 August 2023. HMT published a response to the DSS consultation at Autumn Statement 2023. HMT will lay an SI shortly to set up the legal framework for the DSS.	The Government will lay legislation shortly to implement the DSS and deliver this commitment.
Working with the regulators and market participants to trial a new class of wholesale market venue which would operate on an intermittent trading basis.	In progress The Government continues to work closely with the FCA and industry on the development of the Intermittent Trading Venue (ITV).	The Government announced at Mansion House the establishment of the ITV by the end of 2024.
Delivering for consumers & businesses
Consulting on Consumer Credit Act (CCA) Reform.	Delivered The Government launched its consultation on 9 December 2022 as part of the Edinburgh Reforms. The Government published its response on 11 July 2023 as part of Mansion House.	The Government has delivered this commitment and will consult on more detailed proposals in 2024.
Laying regulations in early 2023 to remove well-designed performance fees from the pensions regulatory charge cap.	Delivered The Government published a consultation response on 30 January 2023 confirming it intended to enact the regulations by Spring 2023. The Government then laid regulations which came into force on 6 April 2023.	The Government has delivered this commitment.
Committing to work with the FCA to examine the boundary between regulated financial advice and financial guidance.	Delivered The Government and the FCA continue to work together on the review. The FCA published an update on the review on 3 August 2023, which included updated guidance to help firms move closer to the current boundary.	A joint Government and FCA policy paper was published on 8 December, outlining initial options for reform and inviting stakeholders to share their views by 28 February 2024.