The Financial Services and Markets Act 2023 has been granted Royal Assent. The comprehensive legislation aims to grow the UK economy while enabling innovation. London has long been a top global financial services center. This leadership has morphed into the UK becoming one of the hottest Fintech hubs in the world.
The Act has a keen eye on Brexit and the impact of the EU separation, and how the UK can continue to play a top role in the financial services sector.
The Act introduces new objectives for the financial regulators; the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
Again, the aim is to facilitate international competitiveness in a rapidly changing world of financial services.
UK Economic Secretary to the Treasury, Andrew Griffith, issued the following statement on the Act:
“2023 is proving to be a banner year for reforming our financial services. This landmark piece of legislation gives us control of our financial services rulebook, so it supports UK businesses and consumers and drives growth. By repealing old EU laws set in Brussels it will unlock billions in investment – cash that can unlock innovation and grow the economy.”
The Act also aims to address the following:
- enhances the scrutiny of the financial services regulators to ensure clear accountability, appropriate democratic input, and transparent oversight
- removes unnecessary restrictions on wholesale markets – implementing the key outcomes of the Wholesale Markets Review
- protects free access to cash in law and introduces crucial protections for victims of Authorised Push Payment scams
- enables the regulation of cryptoassets to support their safe adoption in the UK
- establishes ‘sandboxes’ that can facilitate the use of new technologies such as blockchain in financial markets
As the UK government is publicly pursuing a policy of digital asset innovation, sector participants were pleased with the legislation.
Su Carpenter, Director of Operations at CryptoUK, said:
“We are delighted that the Financial Services and Markets Act has received Royal Assent, just over a year since the Government first set out its vision for the UK to become a global crypto hub. CryptoUK, along with our members from across the crypto and digital asset industry, have been calling for regulation of the market since 2018 to support the continued growth of a healthy, innovative and responsible industry in the UK.”
Carpenter described the legislation as “transformational” in pushing forward the goal of the UK becoming a global hub for crypto. A well-defined regulatory environment will provide clarity for participating crypto firms in the UK.
“Whilst other countries are actively developing their own frameworks for crypto and digital assets, the Financial Services and Markets Act provides a sensible regulatory approach for crypto and digital assets, including stablecoins, bringing these assets within the scope of existing UK financial services regulations,” said Carpenter, who added that it was imperative that the UK maintains its momentum.
“We will continue to work constructively with Government and regulators to remove barriers to innovation and growth, including ensuring that reputable and compliant businesses that want to operate in the UK are able to be licensed by the FCA in good time, and that firms have access to the necessary payment infrastructure such as access to UK bank accounts, all of which will be fundamental to the Government realising its vision for the UK.”