Regulation Update: The Current Status of the Edinburgh Reforms
Search Posts
Company and Commercial litigation
We act on behalf of large international enterprises, UK institutions, SMEs, and high net worth individuals across all aspects of company and commercial litigation.
Personal and Corporate Insolvency
An exacting field, insolvency cases require the very highest levels of precision and expertise. Our blended team guarantees superior results whatever the nature of the case.
Civil Fraud
The number of civil fraud cases heard in the courts has undergone a 50% rise in recent years.
Public Inquiries
Our specialist team have significant experience both of representing individuals, private organisations, campaigners, charitable organisations, and public bodies who find themselves under scrutiny, required to give evidence, or face the prospect of appearing at a hearing.
The Financial Services and Markets Bill received royal assent on 29th June 2023. This act is critical to the delivery of the government’s post-Brexit vision for economic growth, and the creation of an open, sustainable, and technologically advanced financial services sector.
Importantly the Bill enables the delivery of the long-anticipated Edinburgh Reforms. As we approach the anniversary of the Chancellor’s announcement of this package of measures, let’s recap on what the reforms mean for our clients in the financial services sector.
What are the Edinburgh Reforms?
Also known as Big Bang 2.0, the Edinburgh Reforms are a set of sweeping regulatory changes for the UK’s financial services industry.
The package of reforms advances a set of 30 sector-wide policy initiatives as the UK moves away from EU retained law, and transitions to the UK Future Regulatory Framework, or Smarter Regulatory Framework (SRF).
The aim of the reforms is to build an “agile, proportionate and homegrown” rule book to shape the future of financial services regulation specifically designed for the UK. In announcing the measures in December 2022, Chancellor Jeremy Hunt said: “leaving the EU gives us a golden opportunity to reshape our regulatory regime and unleash the full potential of our formidable financial sector”. Key objectives include:
What happens next?
According to the Government, work has already begun in respect of Tranche 1 of the reforms. This includes aspects of the UK Markets in Financial Instruments Directive (UK MiFID) as part of a broader Wholesale Markets Review, the securitisation review, and the Solvency II review. Tranche 2 will include further implementation of the Wholesale Markets Review as well as reforms of Packaged Retail and Insurance-Based Investment Products (PRIIPs), short-selling, taxonomy, the Payment Services Directive, the E-Money Directive, and the Capital Markets Directive.Â
A closer look at some of the changes we can expect.
We’ve cherry-picked and briefly summarised a handful of the reforms we can expect in the coming months:
What can financial services firms expect?
The Government has announced that it expects to make good progress on both tranches by the end of this year. However, it is important to note that there is no fixed date for the revocation of retained EU law on financial services to be completed. Firms can therefore expect that this process will take a number of years and should have in place process for monitoring reform developments, responding to relevant consultations, and implementing changes.
Similarly, as the UK financial services regulatory regime evolves away from the EU law, firms with operations in both the UK and EU will need to conduct an in-depth review of the differences in legislation, and what they mean in practice, in order to remain compliant in both jurisdictions.
If you would like more information about the Edinburgh Reforms and how they might affect your business, or advice on the rapidly-changing financial services regulatory environment, contact a member of the Leverets’Â team today.