The Treasury has unveiled a raft of financial service reforms, including plans to lay regulations to reform the defined contribution (DC) pensions charge cap in early 2023, and plans to increase the pace of DC pension consolidation.
Unveiling the plans, Chancellor, Jeremy Hunt, explained that the new Edinburgh Reforms aim to "turbocharge" growth and deliver a smarter and home-grown regulatory framework that is both “agile and proportionate”.
As part of this, the reforms aim to take advantage of the UK’s position outside the EU, outlining how the framework for financial services regulation will adapt to support a stable and competitive financial services sector.
In particular, the government confirmed that it will be issuing new remit letters for the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) with clear, targeted recommendations on growth and international competitiveness.
In addition to this, the government confirmed plans to consult in early 2023 on issuing new guidance on Local Government Pension Scheme (LGPS) asset pooling, and plans to increase the pace of consolidation in DC pension schemes.
The government also outlined a number of reforms that aim to ensure the sector is delivering for people and businesses across the UK, including plans to work with the FCA to examine the boundary between regulated financial advice and financial guidance.
Alongside this, Hunt confirmed plans to lay regulations in early 2023 to remove well-designed performance fees from the pensions regulatory charge cap, having recently consulted on the draft regulations in this area.
The reforms also addressed climate issues, outlining a number of next steps designed to push the UK to become the "best place in the world for responsible and sustainable investment".
This included plans to publish an updated Green Finance Strategy in early 2023, and to consult in Q1 2023 on bringing environmental, social and governance (ESG) ratings providers into the regulatory perimeter.
Commenting on the reforms, Hunt stated: “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.”
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