UK sets out financial regulation reforms, including review of accountability rules



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Britain says high standards will be maintained

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UK flags reviews in financial-crisis era reforms

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London faces new competition from EU centres

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Consultation on digital pound planned

By Huw Jones

LONDON, Dec 9 (Reuters) - Britain set out a raft of measures on Friday to bolster the City of London's role as a global financial centre, under strain since Brexit ushered in new competition from Amsterdam, Paris and Frankfurt.

The planned reforms also include a review of rules put in place following the financial crisis over a decade ago to make bankers accountable for their decisions and easing capital requirements for smaller lenders, after much lobbying by banks.

Finance Minister Jeremy Hunt said it would be wrong to describe the 30 measures as a "Big Bang" - a reference to deregulating the stock market in the 1980s - that will unravel tougher rules introduced after the global financial crisis.

"We have to make sure that we don't unlearn the lessons of 2008, but at the same time recognise that banks today have much stronger balance sheets," he told an event hosted by the FT.

The City has been largely cut off from the European Union by Brexit, putting pressure on the government to ease rules as Amsterdam overtook London to become Europe's top share trading centre, adding to competition from New York and Singapore.

Leaving the European Union allows Britain to write its own rules, but as it hosts scores of international banks, it has little room to diverge radically from international norms.

"The government’s approach to reforming the financial services regulatory landscape recognises and protects the foundations on which the UK’s success as a financial services hub is built: agility, consistently high regulatory standards, and openness," the finance ministry said in a statement.

Hunt set out his plans at a meeting with financial sector officials in Edinburgh.

Now dubbed the "Edinburgh Reforms", the proposed reset had been trailed as "Big Bang 2.0", raising expectations of a big deregulatory push which left banks fearing costly systems changes.

But the emphasis has shifted to reviewing and tweaking rules while remaining aligned with global standards, rather than any wholesale dismantling of regulations.

The batch of planned reforms include a review of securitisation and short-selling rules, overhauling prospectuses issued by companies when they list, and a plan for repealing and reforming rules that were introduced when Britain was in the EU.

Other plans include a consultation in coming weeks on a central bank digital currency, a project that Prime Minister Rishi Sunak was keen on as finance minister.

There will also be a consultation on regulating compilers of ratings on company's environmental, social and governance (ESG) impacts.

"It is important for people not to overplay this - there is no sense of any move back to a pre-financial crisis world," said Jonathan Herbst, a lawyer at Norton Rose Fulbright.

The EU is updating its own financial rules to reduce remaining reliance on London, and is ahead in areas like cryptoassets.

ACCOUNTABILITY

The reforms target two sets of rules introduced by Britain in the aftermath of the financial crisis over a decade ago when the government had to bail out undercapitalised banks while few individual bankers were punished.

The first set, known as the senior managers' and certification regime (SMCR), requires banks and insurers to name individuals responsible for specific activities, making it easier for regulators to punish them when things go wrong.

Bankers have complained that regulators take too long to vet these senior appointments.

The second set of rules requires banks to "ring fence" their retail arms with a cushion of capital to insulate deposits from a blow up in riskier activities, such as trading derivatives.

The ring-fencing regime will be reformed to free retail focused banks and ease "unnecessary regulatory burdens on firms while maintaining protections for depositors".

Banks have lobbied to either scrap the rule or significantly raise the deposits threshold which triggers the requirement. The changes are likely to ease burdens on smaller banks to help Britain's longstanding attempts to increase competition in a sector dominated by HSBC, Barclays, Lloyds and NatWest.

Bank of England Deputy Governor Sam Woods said in 2020 that he would defend the ring-fencing rules to his "last drop of blood". The BoE said on Friday it would work with the ministry to ensure a safe and competitive financial system.

The ministry will also review EU-era stock and bond trading requirements known as MiFID II, in particular a rule requiring brokers to itemise or "unbundle" their customer charges for research on stock picks and for executing stock orders.

Britain had already set out initial reforms in its financial services and markets bill being approved in parliament. It includes giving regulators an extra objective of paying heed to the City's global competitiveness when writing rules.

Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown, said London’s financial centre has been severely held back since Brexit. "Sadly, the allure simply isn't there, with many of the UK’s brightest companies being snapped up by overseas investors, and London losing its top share-dealing status," she said.

Other reforms already announced include scrapping a cap on banker bonuses and easing capital rules for insurers. A public consultation on regulating crypto assets has also been flagged.
Reporting by Huw Jones, writing by William James; Editing by Kate Holton, Elaine Hardcastle and Louise Heavens

دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔

ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔

کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔

ہم کوکیز کا استعمال آپکو ہماری ویب سائٹ پر بہتریں تجربہ دینے کیلیے کرتے ہیں۔ مزید پڑھیے یا اپنی کوکی سیٹنگ تبدیل کیجیے۔

خطرے کی انتباہ: آپکا سرمایہ خطرے پر ہے۔ ہو سکتا ہے کہ لیورج پروڈکٹ سب کیلیے موزوں نہ ہوں۔ براہ کرم ہمارے مکمل رسک ڈسکلوژر کو پڑھیے۔