The Financial Services and Market Act 2023 (‘FSMA’) came into force this year. It provides the Government and Regulators extensive powers to reform the UK’s financial services framework, especially in the context of crypto assets which have seen a rise in popularity in the last few years.
Background
The Bill was introduced in an attempt to introduce new regulatory framework for financial services by revoking EU financial services regulation and instead delegating rule-making powers to the UK regulators to give them more control over the financial markets.
It was also important to regulators that The Act consolidated regulators rulebooks into one single source of requirements for firms to streamline the process, this is the approach The Act follows and it has been broadly welcomed by the industry.
The Act is seen as central to helping the Government to grow the economy and create an open, sustainable and technologically advanced financial services sector. It’s main aim is to tailor the financial services regulation to fit UK markets, rather than the EU based regulations that preceded it.
Impact
The Act has provided new objectives for the Financial Conduct Authority to facilitate the growth and international competitiveness of the UK economy. It will enhanced the scrutiny and accountability of the regulators in a move to promote a growing economy but with stringent reporting requirements and a greater focus on cost-benefit analyses to help promote success for consumers.
Conclusion
The Act provides an important starting point for the overhaul of EU regulation to be consolidated into UK regulations. It will be however, a multi-year programme to transfer all of the regulatory requirements that have been implemented into a single source, which will require and demand extensive collaboration between the Treasury, the regulators and the wider financial industry.
As The Act was only introduced this year, there is much left to be changed and amended with different schedules of The Act coming into force only at the end of August 2023, and other areas of the previous regulations only being repealed and amended. Its impact will have to be monitored closely to see how it changes the financial markets.
For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email admin@audleychaucer.com or visit our LinkedIn page at https://www.linkedin.com/company/audley-chaucer-solicitors