The Queen’s Speech – what next for UK financial services?

The 2022 Queen’s Speech contained details of two proposed Bills that will impact the financial services community.

The Financial Services and Markets Bill aims to deliver on the Government’s vision for the financial services sector set out by the Chancellor at his 2021 Mansion House speech. It builds on the Financial Services Act 2021, which was the first step in amending the UK’s regulatory regime post-Brexit. HM Treasury has indicated the main elements of the Bill will be:

• to revoke retained EU law on financial services and replace it with a UK-designed approach to regulation;
• to update the objectives of the financial services regulators so as to promote growth and international competitiveness;
• to reform the UK’s capital markets’ rules in order to foster investment;
• to protect continued access to cash across the UK;
• to introduce additional protections for those investing or using financial products; and
• to enable the Payment Systems Regulator to require banks to reimburse authorised push payment (APP) scam losses, to victims of such fraud through no fault of their own.

The Government set out three main benefits of the Bill:

• “Cutting red tape in the financial sector to make the UK an even more attractive place to invest and do business, while making sure that high standards are maintained.
• Harnessing the opportunities of innovative technologies in financial services, including supporting the safe adoption of cryptocurrencies and resilient outsourcing to technology providers.
• Supporting individuals’ confidence in financial services by ensuring continued access to cash across the UK and protecting people from scams.”

The second legislative proposal will be the Economic Crime and Corporate Transparency Bill. This Bill aims to strengthen powers to tackle illicit finance and reduce economic crime (including money laundering, corruption, terrorism-financing and illegal arms movements and ransomeware payments).

Two specific sets of proposals to be contained in the Bill will:

• enable businesses in the financial sector to share information more effectively to prevent and detect economic crime; and
• create civil forfeiture powers to enable the seizure and recovery of cryptoassets so as to mitigate the risk posed by those who cannot be prosecuted in the criminal courts.