Government outlines City regulatory reforms

According to the government, the move – called the Edinburgh Reforms – will a establish a “smarter regulatory framework” that is “agile, less costly and more responsive to emerging trends” and includes a commitment to make substantial legislative progress over the course of 2023 on repealing and replacing Solvency II – which are rules that govern insurers balance sheets.  

Chancellor Jeremy Hunt said: “We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world. 

“The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses. 

“And we will go further – delivering reform of burdensome EU laws that choke off growth in other industries such as digital technology and life sciences.” 

Economic secretary to the treasury Andrew Griffith added: “The UK is a financial services superpower – and we have long benefited from, and are committed to, high quality regulatory standards. 

“Scotland’s role in maintaining our status as the global benchmark for regulation is crucial - with Edinburgh and Glasgow, the two largest UK hubs outside of London. 

“Our reforms deliver smarter regulation of financial services that will unlock growth and opportunity in towns and cities across the UK.” 

It’s work to repeal and replace these laws will be split into two initial tranches and will focus on delivering reform to areas that provide the most significant boost to UK growth and competitiveness.  

These changes are designed to make it more attractive for firms to list and raise capital in the UK and reform how Real Estate Investment Trusts are governed in order to “reduce friction and allow savers to more easily access higher returns.  

Additionally, it’s looking to formally review the provision of investment research in the UK and work with the regulators and companies to trial a new class of wholesale that operates on an intermittent basis.  

The chancellor has also issued new remit letters to regulators the Financial Conduct Authority and Prudential Regulation Authority to emphasise the new secondary competitiveness objectives, as these will have a duty to facilitate the international competitiveness of the UK economy and its growth in the medium to long term.