Documents to download

On 28 January 2021, the second reading of the Financial Services Bill is scheduled to take place in the House of Lords.

The Financial Services Bill is a government bill intended to improve the UK’s regulatory framework for financial services following the end of the Brexit transition period. The bill completed its House of Commons stages on 13 January 2021. It was introduced in the House of Lords on 14 January 2021.

The bill includes measures in a wide range of areas, including some related to Brexit and some aimed at making other improvements to the regulatory framework. The Government states that the measures will support the UK’s position as an international financial centre and enhance the sector’s competitiveness, while maintaining high consumer protection standards. Provisions include:

  • A new regulatory regime for investment firms. The bill would provide the Financial Conduct Authority (FCA) with additional powers to set rules for such firms, while also containing measures to make the FCA more accountable.
  • Implementing recent updates to international standards on banks’ prudential requirements (Basel III and 3.1).
  • Dealing with issues arising from the withdrawal of the interest rate benchmark the London interbank offer rate (LIBOR).
  • Establishing a new regime to allow certain investment funds based overseas to be marketed to UK clients, including retail investors.
  • Introducing a new debt respite scheme.

The bill received cross-party support in the House of Commons. Several government amendments were made, including applying money laundering regulations to electronic money institutions. No opposition amendments were made. Opposition amendments defeated on division included:

  • bringing buy-now-pay-later credit services into the scope of FCA regulation; and
  • requiring that, when making rules, the FCA should have regard to the UK’s target of reaching net zero greenhouse gas emissions by 2050.

Other concerns raised included whether the bill would provide excessive delegated powers to the UK financial regulators and whether a new corporate offence of failure to prevent economic crime should also be introduced.


Documents to download

Related posts

  • National Insurance Contributions Bill

    The bill would introduce national insurance relief schemes for employers based in freeport tax sites, as well as for employers of ex-service personnel. The bill also makes other provisions around national insurance. This briefing considers: the background to the bill; what it would do and what happened during its passage through the House of Commons.

    National Insurance Contributions Bill
  • Mandatory ethnicity pay gap reporting

    Unlike the gender pay gap, there is no legal requirement for companies to publish their ethnicity pay gap. A recent report by the Commission for Race and Ethnic Disparities recommended that the practice remain voluntary due to a lack of diversity in some parts of the country. A coalition of workers’ groups have called for ethnicity pay gap reporting to be made mandatory so employers can better address pay disparities.

    Mandatory ethnicity pay gap reporting
  • Social care funding: a rise in national insurance

    On 7 September 2021, the Government announced plans to increase the funding of health and social care through a new tax: the health and social care levy. The levy will be based on a rise in national insurance and will raise £12 billion a year on average over the next three years. Many commentators have raised concerns that this approach is unfair on younger people and low earners.

    Social care funding: a rise in national insurance