Today, Chancellor Jeremy Hunt introduced a package of financial reforms labelled the ‘Edinburgh Reforms’ as part of the Government’s ongoing efforts to stimulate the UK economy.
Unveiling over 30 regulatory reforms, Hunt set his sights on all areas of the financial sector – from real estate investment to pensions.
Some of the changes introduced include, increasing the pace of consolidation in defined contribution pension schemes, improving the tax rules for real estate investment trusts from April 2023, and introducing changes to the Building Societies Act of 1986.
Hunt said: “We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world.
“The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses.
“And we will go further – delivering reform of burdensome EU laws that choke off growth in other industries such as digital technology and life sciences.”
The Government has also announced that the ring-fencing regime will be reformed – including by freeing retail focussed banks from the regime – easing unnecessary regulatory burdens on firms while maintaining protections for depositors.
Additionally, Hunt stated that the Government would also be commencing a review into reforming the Senior Managers & Certification Regime in Q1 2023.
In response to this widespread financial overhaul, industry experts shared their reactions:
Robin Fieth, BSA chief executive, said: “We have been working with the Treasury for some time on secondary legislation that will partially update the Building Societies Act, which has not been fully revised for 25 years.
“We heartily welcome this announcement which marks excellent progress in delivering legislation that is fit for purpose, enabling building societies which are a key part of today’s financial services sector to better serve their members and provide competition in financial services.”
Ben Blackett-Ord, executive chair at Bovill, added: “The Chancellor has announced a review into the Senior Managers & Conduct Regime (SMCR) as part of the proposed Edinburgh Reforms.
“Like a number of pieces of regulation introduced in the wake of the financial crisis, the Government believes it’s time to assess the effectiveness of SMCR as an enforcement tool.
“Over the years we have seen consistently low numbers of investigations and enforcement actions. Culture has almost certainly improved and SMCR has had a role to play to play in this, as more rigour has been applied to the approval process.
“However, as long as these enforcement numbers remain low questions remain over the SMCR’s role as an effective deterrent from poor behaviour by senior management.
“Having a system that is effective at policing and then punishing senior individuals is key to the credibility of the regulatory system overall, and therefore our future competitiveness as a global financial centre.
He concluded: “The SMCR still has a long way to go to prove its worth, and a review is timely if the regime is to serve its proper purpose of bringing senior people to account.”
