Rachel Reeves’ first Mansion House speech suggests change in approach to regulation

During her first Mansion House speech as chancellor, Rachel Reeves said that the government’s approach to regulation would be a critical part of its aim to grow the UK’s economy. She stated that “the UK has been regulating for risk, but not regulating for growth.”

The speech shows that there is a clear drive from the Government to reduce the regulatory burden on authorised firms. To achieve this, she set out some key initiatives:

  • A Treasury, FCA, and PRA consultation on removing the Certification Regime.
  • A PRA consultation on reducing the length of pay deferrals.
  • The completion of the FCA’s Handbook Review, removing duplication from the rulebook.
  • An FCA consultation on changes aimed at transforming financial advice and guidance.

Ms Reeves’ comments on regulation suggest that the government would place more emphasis on growth, competitiveness, and investment and make better use of the regulators’ growth and competitiveness secondary objectives. To this end, the Treasury has issued new growth-focused remit letters to the FCA, PRA, Monetary Policy Committee, Financial Policy Committee, and the Payment Systems Regulator.

In an attempt to create a surer climate for investment, the FCA and the FOS will be issuing a joint call for Input seeking to improve the rules governing how the FOS operates. This will build on a new agreement between the two institutions on how they cooperate on matters including historic market practice and mass redress events.

Ms Reeves also set out steps aimed at building a partnership between government and the financial services sector. Some of the initiatives set out in the speech include:

  • Legislation to establish a new stock market (called PISCES) by May 2025, aimed at supporting companies to scale and grow.
  • A pilot to deliver a Digital Gilt Instrument (referred to as DIGIT) using distributed ledger technology designed to support innovation in the financial services sector.
  • A consultation on captive insurance to create a new approach focused on cementing the UK’s position as a leading financial services centre.
  • A call for evidence on the credit union ‘common bond’ and asking regulators to report on the mutuals landscape.
  • Establishing an industry-led Mutuals Council aimed at driving growth in the sector.
  • Publishing a National Payments Vision including action designed to progress Open Banking and support fintech businesses.

The speech also covered the Government’s approach to the European Union. There’s no plan to re-enter the single market or customs union, but the Government is looking to “reset” the UK’s relationship with the EU.

What does this mean for firms and how can Bovill Newgate help?

This approach from the new government means that, although there is regulatory change on the horizon, this has the potential to reduce the ongoing costs of being regulated and could create new opportunities for financial services firms. We will continue to monitor and assess how changes will impact firms we work with and provide advice on how changes to regulation should be approached.