UK Expands Financial Regulators’ Duties

The U.K. will be looking at making its regulators help boost growth and competition in finance, in addition to their other tasks, a Wall Street Journal (WSJ) report says.

Their normal duties like maintaining financial stability and consumer protection will still be first priority.

But the changes, if they go through, will help give more freedom to regulatory agencies, letting them rewrite rules on things like IPOs, green finance and crypto, WSJ reports. These ideas come after the Brexit movement, which took its full effect earlier in 2021. The U.K. once had to follow rules from the EU on finance, but the new proposals will serve as a way to do away with those rules.

With the changes, regulators would have more autonomy on how to act, and would be able to make rules to help London’s financial scene flourish.

WSJ writes that some of the proposed changes include changing rules on banker compensation and bonuses, private equity firms, hedge funds and insurance.

WSJ writes that making it so regulators have to compete internationally will make it so they can’t make rules that are “too onerous,” Nicholas Edge, a policy adviser with London’s Investment Association, says. That firm represents assets with over £9.4 trillion.

Edge said the idea was that the regulators won’t be able to impose higher standards on the U.K. than is appropriate for the rest of the world.

London previously was the official hub for EU banking and finance, but it did away with that as the population voted for Brexit in 2016, leaving the bloc. Brexit has since made it harder for London to serve EU companies because some requirements make it so things like share trading have to take place within the EU.

PYMNTS reported recently that Brussels is proposing to end almost all cross-border selling of services based outside the EU.

See also: Brussels Proposes End to Banks’ Cross-Border Services Sales from Outside EU

This could end up hurting lenders in London and elsewhere. But the idea is to streamline how banks operate in the EU, and to give regulators power to turn some branches into subsidiaries, giving more oversight.