Mansion House Update February 2022
On the 10 February 2022, the Economic Secretary to the Treasury provided an update on the progress government is making to deliver its vision for the future of financial services in the UK.
On 1 July 2021, the Chancellor’s Mansion House speech and accompanying document, ‘A new chapter for financial services’, set out the government’s vision for an open, green, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses, and powering growth across all of the UK.
Since then, government has made significant progress delivering on this ambitious vision to make the UK’s financial services sector the most trusted and competitive place to do business.
An open and global financial hub
At Mansion House the Chancellor said the UK would use its strengths as an open and global financial hub to establish and enhance strong relationships with jurisdictions all around the world, attracting investment and increasing opportunities for cross-border trade. Since then, government has:
-
Continued to deepen ties internationally through: regular dialogues with advanced markets such as the USA, Japan and Singapore to collaborate on new challenges and opportunities; discussions to increase access to emerging markets such as the Economic and Financial Dialogue with India and HM Treasury-led discussions with Brazil and China; and pursuing agreements with high-growth markets, such as Saudi Arabia, Chile and Kenya.
- Continued to negotiate a ground-breaking Mutual Recognition Agreement with Switzerland, incorporated financial services provisions in trade deals with Australia and New Zealand, reached agreement in principle on a Digital Economy Agreement with Singapore, and has upcoming negotiations with India, Mexico and Canada.
- Ensured the UK continues to take action to ensure it is a safe and competitive place to locate financial services business and activities through delivery of our Economic Crime Plan.
A world leader in green finance
The government has taken world-leading action to green the financial system. In October 2021 London was ranked as the world’s leading green finance centre. This was attributed to recent government action. Since Mansion House government has:
-
Committed to becoming the world’s first net zero-aligned financial centre. This means moving towards mandatory transition planning disclosures and publishing a sector-wide transition pathway.
-
Secured unprecedented industry backing for a net-zero future. As a result of the COP26 Private Finance Campaign $130tn (40% of the world’s financial assets) is now committed to net zero.
-
Continued the UK’s track-record of thought-leadership by publishing the Greening Finance Roadmap. This sets out a comprehensive plan for economy-wide Sustainability Disclosure Requirements.
-
Kick-started a green financing programme, with the largest debut sovereign green bond. The government has also launched the world’s first sovereign retail green savings bond, allowing savers to contribute towards the government’s green initiatives.
A sector at the forefront of technology and innovation
The Chancellor also said the UK would take steps to remain a world leader in fintech, whilst ensuring its regulatory system harnesses innovation, and for the UK to lead the conversation on Central Bank Digital Currencies via the G7 presidency. To ensure the financial services sector is one at the forefront of technology and innovation government has:
-
Continued to take forward measures committed to following the Kalifa Review of UK Fintech, such as securing funding to establish the Centre of Finance, Innovation and Technology, to ensure the UK remains a world-leader in fintech.
-
Confirmed plans to bring cryptoassets into financial promotion regulation - so cryptoasset promotions are held to the same high standards for fairness, clarity and accuracy as in the wider financial services industry.
-
Consulted on proposals for a new regulatory regime for stablecoins.
-
Set out further detail on work to explore a potential UK central bank digital currency (CBDC), with a commitment to consult with the Bank of England later this year, as well as announcing plans for a Financial Market Infrastructure Sandbox to enable use of new technology in financial markets
-
Published a set of Public Policy Principles for Retail Central Bank Digital Currencies (CBDC) alongside a G7 Statement on CBDCs and digital payments via the UK’s presidency.
-
Published the Payments Landscape Review response, setting out the government’s future priorities to ensure the UK’s payments sector remains world leading.
A competitive marketplace promoting effective use of capital
Finally, the Chancellor said the government would reform policy framework to best suit the UK and attract investment that will support and encourage growth, whilst tailoring regulation to attract listings in the UK. To guarantee the sector is a competitive marketplace promoting effective use of capital government has:
-
Made changes to the bank surcharge, in order to ensure that the combined rate of tax on banking profits in the UK is competitive and that the tax system is supportive of growth within the UK banking market.
-
Implemented all of the recommendations for HM Treasury from Lord Hill’s Listings Review, including consulting on the UK’s prospectus regime and launching the UK Secondary Capital Raising Review. The FCA has also taken forward a range of reforms in line with Hill’s recommendations, including reducing free float requirements, allowing Dual Class Share Structures within the premium listing segment, and removing barriers to listing via Special Purpose Acquisition Companies (SPACs).
-
Announced the way forward on key issues in the Wholesale Markets Review consultation, committing to legislate at the earliest opportunity to remove the share trading obligation and the double volume cap to give firms greater choice about where they can trade and therefore get the best prices for investors.
-
Consulted through the Future Regulatory Framework Review on proposals for reform to ensure that, having left the EU, the UK maintains a coherent, agile, and internationally respected approach to financial services regulation that is right for the UK.
-
Published a report and response to our call for evidence as part of the review of the Securitisation Regulation, identifying ways in which the Regulation could usefully be re-visited to ensure it best delivers for the UK securitisation market.
-
Published the response to a call for input on the government’s review of the UK funds regime, setting out conclusions and which measures will be progressed or explored further.
-
Partnered with the City of London Corporation to publish, from Summer 2022, an annual review of financial services competitiveness. The report will monitor progress across a host of metrics – and will reflect feedback from businesses on what is going right and where things can still improve.