Chancellor sets out post-Brexit roadmap for UK financial services

Finance minister Rishi Sunak has announced a new roadmap to "ensure UK financial services remains competitive" now it has left the EU.

In his first address at Mansion House to an audience of young and aspiring leaders in financial services, Sunak said that government reforms would see the UK become a leader in green finance, a sector at the forefront of technology and innovation, a competitive marketplace, and an open and global financial hub. He also announced a consultation proposing new laws around the protection of cash.

“Financial services don’t just generate prosperity at home,” the chancellor said in his speech. “They give us the economic power to project our values on the global stage.”

He added: “More open, more competitive, more technologically advanced, and more sustainable – that is our vision for financial services. The Roadmap we are publishing today sets out a detailed plan for the next few years – and I look forward to delivering it, together.”

Green finance

The chancellor announced plans to require companies, pension schemes, financial services firms and their investment products to report on the impact they are having on the climate and environment - as well as the risks and opportunities facing their business.

The government said these new integrated Sustainability Disclosure Requirements will bring together and streamline existing climate reporting requirements and go further to ensure consumers and investors have the information they need to make informed investment decisions and drive positive environmental impact.

The Government intends to legislate to deliver this and will set out its approach to green finance regulation ahead of COP26.

The government will also work with the Financial Conduct Authority (FCA) to create a new sustainable investment label - a quality stamp - so that consumers can clearly compare the impacts and sustainability of their investments for the first time.

Details have also been announced on the types of green projects that will be eligible for funding when the UK issues its first ever sovereign green bond, known as a green gilt, later this year, and a world-first green savings bond offered by NS&I, with yesterday’s publication of the UK Government Green Financing Framework.

Green projects like zero-emissions buses, offshore wind and schemes to decarbonise homes and buildings will be eligible for funding, with around £15 billion of green gilts issued this financial year.

Access to cash

Sunak said that the UK is supporting innovation and the adoption of cutting-edge tech – but stressed the importance of having the right protections in place, with plans for legislation to protect access to cash.

The government published a consultation yesterday outlining the government’s plans for new laws to make sure people only need to travel a reasonable distance to pay in or take out cash, and that the FCA has the powers that it needs to hold firms to account to meet these requirements.

The government said alongside the legislation that has already been passed to enable cashback without a purchase, these proposals will support the continued use of cash in people’s daily lives and help enable local businesses to continue accepting cash by protecting deposit facilities.

A competitive marketplace

The chancellor revealed a set of consultations on reforms to the regulation of wholesale capital markets and a fundamental review of the prospectus regime following recommendations in Lord Hill’s listings review.

The prospectus review will cover the rules governing the information companies must publish when raising finance to make it simpler, more agile and more effective. New proposals to reform the UK’s wholesale markets regime aim to deliver a rulebook which is fair, outcomes-based and supports competitiveness, whilst ensuring the UK maintains the highest regulatory standards.

Open and global financial hub

The chancellor also outlined how the UK “will use its strengths as a global financial hub” to establish and enhance strong relationships with jurisdictions all around the world, seeking closer links with advanced and emerging financial centres.

He highlighted how a new financial services partnership with Singapore was agreed on Wednesday, and that the UK is negotiating a deal with Switzerland, which the government describes as “the most ambitious financial services agreement ever attempted.”

Sunak also noted the importance of confidently pursuing an economic relationship with China in a safe, mutually beneficial way without “compromising the UK’s values or security.”

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