The government has announced plans to revoke EU financial services regulations and replace it with new rules which are "designed for the UK".
In today's Queen's Speech, Prince Charles announced that the government would bring in new legislation to "strengthen" the UK's financial services industry and ensure it acts "in the interest of all people and communities".
This will be achieved through a financial services and markets bill which will be introduced the coming year.
The government has said the main benefits of the bill would consist of "cutting red tape" to make the UK a more attractive place to invest and do business while maintaining high standards.
As well as revoking retained EU law, the government has said the bill will update the objectives of the financial services regulators to "ensure a greater focus on growth and international competitiveness" and will reform the rules that regulate the UK's capital markets to promote investment.
It will also introduce additional protections for those investing or using financial products, to make it safer and support the victims of scams.
Among the financial rules which might face the chop is Mifid II, which includes a range of rules affecting advisers on cost and charge disclosures. It also includes rules on product governance and target markets.
The 10 per cent drop rule was also part of Mifid II, but this was put on hold during the Covid-19 pandemic and the FCA has already consulted on scrapping it.
The government will also introduce a new economic crime and corporate transparency bill which will introduce identity verification for people who manage, own and control companies and other UK registered entities.
This will be aimed at improving the accuracy of Companies House data, to support business decisions and law enforcement investigations.
The bill will also provide Companies House with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies.
David Postings, chief executive of UK Finance, said: "We strongly welcome the announcement in the Queen’s Speech that the government will bring forward a financial services bill and a further economic crime bill which we see as two key pieces of legislation for financial services.
"The financial service bill provides the opportunity to tailor the UK’s regulatory framework and so create a more competitive financial services sector post-Brexit, supporting jobs and investment across the country."
Steven Cameron, pensions director at Aegon, said: "The inclusion of the financial services bill in the Queen’s Speech paves the way for helpful changes to how financial services are regulated and in turn the services firms can offer to customers.
"Many already benefit from financial advice, but for some this may be disproportionately expensive. Current rules make it very difficult for firms to offer anything between generic information and full regulated advice. As we adjust to a UK outside of the EU, there’s an opportunity to move away from EU regulations and open up new forms of support, allowing the financial services industry to help more people.
"We’re strongly in favour of regulated firms being able to offer a more personalised form of guidance, which would nudge them in a positive direction, acting in their interest, without recommending any specific product.
"Helping customers with the cost of living squeeze is at the heart of the government’s agenda. Changing regulations to allow new forms of support in managing finances and financial futures would be a big help here, with the added benefit of having zero cost to government.”
The speech also included a Brexit freedoms bill aimed more generally at ensuring the UK seizes the benefits of Brexit and uses its regulatory freedoms.
The Financial Conduct Authority has previously dismissed the idea of a "bonfire of regulations" after Brexit.
Speaking in 2017, the FCA's then-executive director of strategy Christopher Woolard said: "This is an international system we are talking about here. If you look at where the majority of business is done, it is in pretty rough enforcement jurisdictions.
“What looks like a good plan to deregulate in certain circumstances comes back to bite people years later when the compensation scheme kicks in. This is a system of international standards where money tends to have a flight to quality.
“This phrase of ‘Singapore-on-Thames’ gets used a lot and clearly the Singaporean authorities have an approach to how they attract international business but the thing I have learnt when dealing with their regulator is that their system of regulation is pretty much the same standard you would find in the US or Hong Kong or here."
damian.fantato@ft.com
