UK Parliament
Financial Services and Markets Bill – House of Lords updates webpage and publishes text from second reading – 10 January 2023
The House of Lords’ Financial Services and Markets Bill (FSMB) webpage has been updated to include new text. The text relates to the House’s second reading of the FSMB, which took place on 10 January 2023 and included a general debate on all aspects of the Bill. The update also notes that the Committee stage of the FSMB, a line by line examination of the Bill, is scheduled to begin on 25 January 2023.
House of Lords: FSMB Updated webpage
Hansard: Financial Services and Markets Bill: Volume 826
Prudential Regulation Authority and Financial Conduct Authority
FSCS management expenses levy limit - PRA and FCA publish joint Consultation Paper - 12 January 2023
The PRA and the FCA have published a joint Consultation Paper (PRA CP1/23 and FCA CP23/3) on the 2023/24 management expenses levy limit (MELL) for the Financial Services Compensation Scheme (FSCS).
The proposed MELL amounts to £109.8 million (comprising an FSCS management expenses budget of £99.8 million and an unlevied contingency reserve of £10 million). The relevant draft rules can be found in Appendices 1 and 2 of the Consultation Paper; in preliminary versions of the FCA Handbook: Financial Services Compensation Scheme (Management Expenses Levy Limit 2023/2024) Instrument 2023; and the PRA Rulebook: Non-Authorised Persons: FSCS Management Expenses Levy Limit and Base Costs Instrument 2023.
The proposed MELL would apply from 1 April 2023 to 31 March 2024. The deadline for responses to the consultation is 9 February 2023. Final rules would be in place for the start of the FSCS’s financial year on 1 April 2023.
See item below in this section for FSCS’s 2023 budget update.
PRA and FCA Joint Consultation Paper (CP1/23 and CP23/3)
FCA Webpage
PRA Webpage
Financial Conduct Authority
Transparency rules - FCA Publish Consultation Paper – 12 January 2022
The FCA has published a Consultation Paper (CP23/2*) on how it intends to streamline its transparency rules on structured digital reporting of annual financial statements. These rules apply to companies that have securities admitted to trading on UK regulated markets (in-scope companies).
The FCA is proposing to simplify the structure of the current rules by:
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deleting an existing regulatory technical standard onshored from EU law;
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relocating substantive requirements directly into the Disclosure Guidance and Transparency Rules sourcebook, while removing some unnecessary provisions and making other minor changes and clarifications; and
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proposing new guidance in a Technical Note on what the FCA considers to be ‘generally accepted taxonomies’ – i.e. detailed templates used by companies to label or ‘tag’ specific information in their annual financial reports, which are based on the International Financial Reporting Standards.
The FCA’s proposals are intended to support in-scope companies by making the existing requirements easier to locate and navigate. In addition, it is intended that the proposals will improve certainty for companies and support service providers with a new framework that enables the FCA to stay aligned with taxonomies that are generally accepted in this area. By making the requirements easier to understand the FCA hopes to promote compliance and reduce the likelihood of making simple formatting errors.
The consultation closes on 24 February 2023.
FCA Consultation Paper 23/2*
FCA Webpage
Financial Services Compensation Scheme
FSCS budget and expenditure – FSCS publishes budget update and latest expenditure forecast – 12 January 2023
The Financial Services Compensation Scheme (FSCS) has issued its latest budget update for 2023/24 and expenditure forecast for 2022/23.
The update outlines the FSCS’ proposed management expenditure of £99.8 million for 2023/24 – a 5% increase on its previous budget announced at this time last year. The FSCS explains that its forecasted running costs for 2023/24 now stand at £89.2 million – a reduction of £6.3 million against the budget it detailed in January 2022, which results from the processing of fewer claims than had been expected, primarily in the Life Distribution, Investment Intermediation and Investment Provision classes.
The FSCS’ Chief Executive, Caroline Rainbird, indicates in the update that the complexity of claims dealt with by the FSCS means that it is likely to increase its budget in subsequent years and will expand investment in its claims handing capabilities over the next three years to ensure it continues to provide an efficient and accessible service.
Budget update
Statement by FSCS Chief Executive
Press release
UK Finance
Industry alliance on digital currency – UK Finance publishes joint policy statement – 11 January 2023
UK Finance has published a joint policy statement of five associations which have formed an industry alliance, the ‘UK Forum for Digital Currencies’ (UKFDC), to guide the UK’s digital currency future. In addition to UK Finance, the members are made up of the City of London Corporation, The Payments Association, the Digital Pound Foundation and TheCityUK.
The joint statement notes that digital currencies have been gaining rapid momentum over the past few years and have the potential to change how society thinks about, and uses, money. The UKFDC recognises this growing interest and the adoption of new forms of digital money globally and how it will open many opportunities for the UK to remain competitive in fintech and lead financial innovation within an appropriate regulatory framework. The UKFDC seeks to enable a safe and secure environment for innovators to grow and attract international investment into the UK. The statement indicates it will do this in a number of ways, including by:
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collectively advocating for the development of diverse, effective and competitive ecosystems for both publicly and privately issued digital currencies and for a legal and regulatory framework that promotes innovation;
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collectively welcoming and supporting the government’s plan to make the UK a global cryptoasset technology hub, which follows a balanced approach to innovation and risk and is consistent with the mantra, “same activity, same risk, same regulatory outcome”;
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collectively supporting the development of the right incentives and right design requirements for the industry to better serve all stakeholders in the long term;
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welcoming the process and approach set up by HM Treasury and the Bank of England regarding a retail central bank digital currency and their commitment to partner with the private sector; and
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helping to create a constructive bridge between the trade associations representing incumbents, and the new emerging players, in the payments sector.
Five associations form industry alliance to guide the UK’s digital currency future
Press release
Digital Regulation Cooperation Forum
DRCF workplan 2023 to 2024 – Call for input deadline extended – 9 January 2023
The Digital Regulation Cooperation Forum (DRCF), comprising of the FCA, the Competition and Markets Authority (CMA), the Office of Communications (Ofcom) and the Information Commissioner’s Office (ICO), has extended the deadline for responses to its call for input on the issues that the DRCF should consider as it develops its plan of work for 2023-2024, published in December 2022. The deadline for the consultation has been extended to 27 January 2023.
DRCF workplan consultation
Webpage
International Institute for the Unification of Private Law
Draft Principles on Digital Assets and Private Law – UNIDROIT launches public consultation – 12 January 2023
The International Institute for the Unification of Private Law (UNIDROIT) has launched a public consultation regarding a set of Draft Principles on Digital Assets and Private Law which were prepared by UNIDROIT’s Working Group.
The purpose of the consultation is to ensure that the Principles are well suited to application in a variety of different contexts, including in both civil law and common law jurisdictions, as well as in developed economies, emerging markets and developing economies. UNIDROIT are keen to seek feedback from parties engaged in the digital asset industry on whether the Principles sufficiently address the private law issues which arise in transactions in respect of digital assets, and apply to entities which provide services relating to digital assets.
The consultation closes on 20 February 2023 and all comments should be provided using UNIDROIT’s online form. The Working Group will consider submissions at its next session in early March 2023.
Consultation on Draft Principles on Digital Assets and Private Law
Press release
Online response form
