On 29 April 2021, the Financial Services Bill received Royal Assent in the UK, becoming law as the Financial Services Act 2021 (the “Act”). This is the first significant step for the UK in shaping its financial services regulatory framework following transition out of the European Union (“EU”), with HM Treasury affirming last week that the Act “will ensure the UK remains an open and dynamic financial centre, with the highest regulatory standards, and protect people across the UK as they use financial services”.
The Act makes extensive amendment to the current regime, including reforms in relation to the following matters:
The commencement dates for many of these provisions are still to be announced.
Although this is key milestone for the UK in its exit from the EU and although a Memorandum of Understanding has now been agreed in principle with the EU in relation to financial services, the possibility of any equivalence decisions remains uncertain. Accordingly, whilst the relationship between the UK and EU in the context of financial services continues to settle, it is likely that the UK will remain cautious in the approach to its departure from the EU regime.
Benjamin Mark-Alexander Beswick, London Associate, and Tom Macintosh Zheng, London Trainee Solicitor, contributed to the drafting of this alert.