The UK’s
Financial Conduct Authority (FCA) launched a comprehensive consultation today
aimed at transferring key investment firm regulations from retained EU law into
its rulebook, marking a significant step in Britain’s post-Brexit financial
reforms.
FCA Proposes Major
Overhaul of Investment Firm Rulebook
The
regulator is seeking to move requirements from the MiFID Organizational
Regulation into its handbook without making substantial policy changes,
providing continuity for investment firms while laying groundwork for future
streamlining of rules.
“We want to
provide continuity to firms and therefore the overall approach we are proposing
in this consultation is to retain the current substance of the requirements,” the
FCA commented in the consultation paper. “We are interested in views about
reform, either now or in the future, to make the rules better suited to the
range of UK authorized firms and clients they provide services to.”
As noted by
the FCA, they also seek feedback on situations where the recently implemented Consumer
Duty rules do not apply. Companies are thus given the opportunity to share
their views on the current regulations and the need to report progress
in adopting a consumer-driven approach.
The
consultation affects a broad spectrum of financial institutions, including
investment firms, credit institutions, third-country firms, and fund managers.
Firms have until February 28, 2025, to respond to the main proposals, with an
extended deadline of March 28 for feedback on potential future reforms.
The move
comes as part of a broader initiative announced in the Chancellor’s Mansion
House reforms
to enhance the UK’s financial services competitiveness. The Treasury will
separately publish draft legislation to address non-firm facing aspects of the
regulations.
This is
another regulatory move after the watchdog announced two weeks ago a major
reform of its enforcement disclosure procedures. It implemented broader
document review standards and enhanced staff training protocols.
Regulatory Framework
Updates
The
proposals aim to maintain existing consumer protection levels while simplifying
the regulatory framework. The FCA confirms that consumers will continue to
benefit from the same protections currently in place for investment services.
The changes
are designed to ensure market stability during the transition, with the FCA
promising minimal disruption to existing operations. The consultation aligns
with the FCA’s secondary objective of enhancing the UK’s international
competitiveness and growth, particularly in the post-Brexit environment.
The
FCA’s proposal covers several critical areas:
- Client
categorization - Disclosure
requirements - Suitability
assessments - Best
execution practices - Inducements
and research - Conflicts
of interest management - Business
continuity planning - Risk
management and compliance
The
Prudential Regulation Authority will launch a parallel consultation on
transferring relevant provisions into its rulebook, with both regulators
working to align their approaches.
The UK’s
Financial Conduct Authority (FCA) launched a comprehensive consultation today
aimed at transferring key investment firm regulations from retained EU law into
its rulebook, marking a significant step in Britain’s post-Brexit financial
reforms.
FCA Proposes Major
Overhaul of Investment Firm Rulebook
The
regulator is seeking to move requirements from the MiFID Organizational
Regulation into its handbook without making substantial policy changes,
providing continuity for investment firms while laying groundwork for future
streamlining of rules.
“We want to
provide continuity to firms and therefore the overall approach we are proposing
in this consultation is to retain the current substance of the requirements,” the
FCA commented in the consultation paper. “We are interested in views about
reform, either now or in the future, to make the rules better suited to the
range of UK authorized firms and clients they provide services to.”
As noted by
the FCA, they also seek feedback on situations where the recently implemented Consumer
Duty rules do not apply. Companies are thus given the opportunity to share
their views on the current regulations and the need to report progress
in adopting a consumer-driven approach.
The
consultation affects a broad spectrum of financial institutions, including
investment firms, credit institutions, third-country firms, and fund managers.
Firms have until February 28, 2025, to respond to the main proposals, with an
extended deadline of March 28 for feedback on potential future reforms.
The move
comes as part of a broader initiative announced in the Chancellor’s Mansion
House reforms
to enhance the UK’s financial services competitiveness. The Treasury will
separately publish draft legislation to address non-firm facing aspects of the
regulations.
This is
another regulatory move after the watchdog announced two weeks ago a major
reform of its enforcement disclosure procedures. It implemented broader
document review standards and enhanced staff training protocols.
Regulatory Framework
Updates
The
proposals aim to maintain existing consumer protection levels while simplifying
the regulatory framework. The FCA confirms that consumers will continue to
benefit from the same protections currently in place for investment services.
The changes
are designed to ensure market stability during the transition, with the FCA
promising minimal disruption to existing operations. The consultation aligns
with the FCA’s secondary objective of enhancing the UK’s international
competitiveness and growth, particularly in the post-Brexit environment.
The
FCA’s proposal covers several critical areas:
- Client
categorization - Disclosure
requirements - Suitability
assessments - Best
execution practices - Inducements
and research - Conflicts
of interest management - Business
continuity planning - Risk
management and compliance
The
Prudential Regulation Authority will launch a parallel consultation on
transferring relevant provisions into its rulebook, with both regulators
working to align their approaches.
This post is originally published on FINANCEMAGNATES.