In response to the UK Government’s reforms announced last night, the Financial Conduct Authority (FCA) has said that it will ‘carefully consider’ the changes proposed, working closely with the Treasury.
Jeremy Hunt confirmed in his speech that the government has accepted all proposals made in Rachel Kent’s ‘Investment Research Review’ – which includes the introduction of a new platform and move away from unbundling rules – and stated that the Government welcomes the FCA’s “immediate engagement with the market to inform any rule changes on removing the requirement to unbundle research costs by the first half of next year”.
Speaking in an announcement, the FCA has confirmed its intention to reach out to the market immediately, “which will inform the content of any consultation proposals”.
Following initial feedback, the FCA has said that it intends to assess market opinion regarding an accelerated timeframe for rule changes – suggesting the introduction of relevant rules by H1 2024, subject to board approval.
The UK watchdog specifically highlighted it would be “[consulting on] potential regulatory changes that could introduce more options on how to pay for investment research so as to achieve an outcome of improving investor research into markets while providing value for money to institutional and retail investors”.
The FCA confirmed that, based on these discussions with individual firms and relevant market participants, it would be “open to consider swift actions, if needed, to support firms impacted by changes to regulation in other jurisdictions”.
The reforms, announced by Jeremy Hunt last night in his first Mansion House speech as chancellor of the exchequer, are aimed at bolstering the UK’s position in global wholesale markets post-Brexit.
His speech also asserted that smart regulation for both listing reforms and the pension industry will work to “unlock better returns for savers and more growth capital for businesses”.
He added: “With cooperation between government, regulators and business closer than ever […] we will deliver not just more competitive financial services but a more innovative economy. More money for savers. More funding for our high-growth companies [and] more investment to grow our economy.”