Regulation  

Regulation around the corner

We will see traditional paradigms being challenged with increased use of FinTech to deliver services to retail clients. There will be more start-ups in this area, and more providers will offer systems for financial institutions to white-label.

We will see the FCA making the most of its competition powers alongside its regulatory function. In summer 2016 we will learn the outcome of the Asset Management Market Study. Among areas under review are aspects of the general insurance, retail banking, and fixed-income instruments, currencies and commodities markets.

The ‘Brexit’ issue will come to the fore this year; my best guess is that the referendum will take place in Autumn. Brexit is a key issue for financial services. The chance of a ‘leave’ vote cannot be underestimated, particularly with the current level of disquiet over the EU’s handling of the migrant crisis and general disillusion with the status quo. Financial services firms think a ‘leave’ vote would create huge uncertainty over the nature of the post-exit UK/EU relationship.

Progress on further Eurozone integration will run on into 2017. Likely treaty changes will not become clear before then. The short-term focus is on driving forward key CMU initiatives such as the proposed securitisation legislative package and prospectus regulation. The House of Lords’ EU Economic and Financial Affairs Sub-Committee has heralded CMU as a “golden opportunity” for the UK and potentially “key to economic recovery”.

Paul Edmondson is head of financial services of CMS