Background
The Forum’s members are the Bank of England (including the PRA), the FCA, the Payment Systems Regulator, the Competition and Markets Authority, the Financial Reporting Council, The Pensions Regulator and the Information Commissioner’s Office. HM Treasury attends as an observer member. The Forum was launched to strengthen coordination between members, and the Grid (first published in April 2020) sets out the regulatory pipeline so that the financial services industry and other stakeholders can understand – and plan for – the timing of the initiatives that may have a significant operational impact on them.
The Forum usually publishes the Grid twice a year, providing detail on the timing of initiatives over a 24-month horizon. The Grid also highlights key examples of closely interconnected initiatives to help stakeholders easily identify these.
Latest edition of the Grid – February 2023
As pointed out by Nikhil Rathi (Chief Executive Officer, FCA) and Sam Woods (Deputy Governor, Prudential Regulation, Bank of England), this sixth edition of the Grid ‘comes at a time of new horizons for the future of financial services regulation’. They explain that delaying the November 2022 Grid to now has allowed the regulators to better consider how the opportunities provided by the December 2022 Edinburgh Reforms, including the Government’s policy statement ‘Building a Smarter Financial Services Framework for the UK’, will impact the regulatory pipeline and initiatives over the coming years.
Seizing new opportunities
While many of the concerns regulators were considering when the previous edition of the Grid was published last May are still relevant (notably, financial sanctions in relation to the war in Ukraine, and the cost of living crisis), regulators are now also using the prospect of a new framework outside of the EU as a chance to proactively move forward and deliver better outcomes for consumers and industry. This is being delivered both with new pieces of work (including the Edinburgh Reforms and the repeal and replacement of retained EU law to regulators’ rulebooks) and with new opportunities to reduce regulatory burdens (including transforming data collection and a ‘Strong and Simple’ prudential framework for non-systemic banks and building societies).
Key themes and measures from the Edinburgh Reforms and the Financial Services and Markets (FSM) Bill are reflected in the Grid’s commitments, including:
- reforming the ring-fencing regime for banks;
- consulting on removing burdensome customer information requirements set out in the Payment Accounts Regulations 2015;
- overhauling the regulation of prospectuses;
- review of the Senior Managers and Certification Regime (SMCR);
- ongoing work following Lord Hill’s UK Listings Review Report; and
- consultations on rules for the stablecoin regime, the future regulatory regime for cryptoassets, and oversight of critical third parties.
Future iterations of the Grid will reflect the timings and impacts of any further changes under the Government’s reforms as they are confirmed.
Managing change
Pace and proportionality are key
This edition of the Grid and upcoming editions will continue to reflect UK regulators’ commitment to new ways of working following Brexit. The regulators will also continue to implement core initiatives such as delivery of relevant international standards like Basel 3.1. Now more than ever, the Forum recognises the need to consider the pace and proportionality of initiatives.
Significant undertaking to repeal and replace retained EU law
The Government’s policy statement on the approach to repealing and replacing retained EU law on financial services contains an ambitious plan which the Forum members will be supporting. Progressing this as well as building a smarter regulatory framework will be a significant undertaking for both the regulators and the industry. The Forum members will try to minimise the burden as things move forward. The plan is that future editions of the Grid will provide more information about proposals for repeal of retained EU law, alongside wider initiatives.
Importance of collaboration to ensure success
There is recognition that some initiatives in the Grid may have a particularly high impact on some sectors, such as asset managers and payments providers. For example, measures to prevent authorised push payment (APP) scams through Confirmation of Payee and improved intelligence sharing, and the increased number of initiatives relating to cryptoassets, will require significant collaboration between Government, the regulators and the industry to be successful.
Snapshot of some initiatives added to the February 2023 Grid
The following table outlines the next steps for some key initiatives that are new to this latest edition of the Grid:
Next steps
The FSM Bill is expected to receive Royal Assent this year. While many of the regulatory initiatives in the Bill are already reflected in the Grid, future iterations will provide further clarity on the subsequent timelines and milestones after Royal Assent.
The Forum remains committed to publishing two Grids per year where possible. This edition will be the first Grid of 2023 and the next will be published towards the end of the year. However, in order to bridge the gap between those publications, and in recognition of the impact of the FSM Bill, the Forum will provide a short statement after Royal Assent informing the sector of any important and imminent changes.
The Forum continues to welcome feedback on the Grid, particularly ways in which the Grid has been useful for stakeholders in their planning for regulatory initiatives and where it can improve on this. It is also open to suggestions on how the Grid can be better presented or provided in order to support the Forum’s key objectives. Feedback on the Grid can be sent to the Forum Secretariat at FSRIFSecretariat@fca.org.uk. The Forum Secretariat may share any responses with Forum members.