Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2022 12 09T142202Z 1 LYNXMPEIB80LX RTROPTP 4 BRITAIN EU - Business Express
FILE PHOTO: Small toy figures are seen in front of a Brexit logo in this illustration picture, March 30, 2019. REUTERS/Dado Ruvic/Illustration

Explainer-How Britain is exploiting Brexit to reform finance?

By Huw Jones

LONDON (Reuters) – Britain proposed over 30 reforms on Friday to bolster the City of London’s role as a global financial centre, now outside the European Union and facing competition from Amsterdam, Paris and Frankfurt, as well as New York and Singapore.


Not quite, but it marks a swing in the regulatory pendulum from years of increasing bank capital requirements and tightening consumer protections, to thinking what tweaks are needed to make rules work better for Britain after Brexit.

Initially trailed as a Big Bang 2.0 on the same scale as far-reaching 1980s reforms of share trading, the changes have now been dubbed the “Edinburgh Reforms” after the city where they were formally unveiled by finance minister Jeremy Hunt.

The government has toned down its rhetoric, insisting there will be no ‘race to the bottom’, big departure from international norms, or scrapping investor protections, but that regulators should aid the financial sector’s international competitiveness.

Hunt said it would be wrong call the reforms a Big Bang given the need to avoid ‘unlearning’ lessons from the 2008 global financial crisis and underscored the independence of regulators.

“The City does not want to see deregulation. Today’s announcements are an indication of an evolution, rather than revolution,” said Alasdair Haynes, CEO of Aquis stock exchange.


Britain has already announced an easing of capital rules for insurers and is now turning to banks.

Since January 2019 banks have had to ring-fence their deposit-taking arms with a cushion of capital to insulate them against blow-ups in their riskier activities.

Banks have complained the rules are too strict and hinder smaller ones from competing with bigger lenders in the mortgage market. The government said it will follow recommendations from a review it commissioned and amend the rules.

The government will consult mid-2023 on exempting banks without major investment banking activities from the rules, and on raising the deposits threshold which triggers compliance with ringfencing rules, from 25 billion pounds to 35 billion pounds.


It’s not back to pre-financial crisis ‘lite-touch’.

The government had already announced it will scrap an EU cap on banker bonuses, though other curbs on how bonuses are paid are expected to remain.

Britain introduced rules in 2016 to make senior bankers, adding senior officials at insurers in 2018, directly accountable for the decisions they take after few individuals were punished for misconduct that led to the global financial crisis when taxpayers bailed out lenders.

It was feared as a tool to publicly shame bankers by putting “heads on sticks”, but so far there have been few investigations or enforcement cases. Bankers say regulators also take too long to give the green light to senior appointments.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

The government will review this senior managers and certification regime in the first quarter of 2023, with no indication yet of the scale of any changes.


There will be a raft of reviews as London seeks to catch up with New York in listings.

Topics under review include the rules on short-selling, or bets that the price of stock will fall. The government proposes to scrap outright an EU-era “PRIIPs” explanatory document given to investors, replacing it with an alternative framework.

There will be an industry taskforce to examine the case for halving the time it takes to settle a stock trade from two working days to one, a move already planned in the United States.

Rules on prospectuses that companies give to investors when they list on an exchange will be overhauled, along with a reform of rules for securitisation.

The government commits to putting in place rules for a “consolidated tape” by 2024, to provide market prices for investors to check on best deals across trading platforms.

The government will act on recommendations from a review into improving how listed companies tap investors for fresh funds.

There will be a review of EU rules which require brokers to itemise fees for stock picking research and executing stock orders, known as ‘unbundling’ – a rule the EU has already partially reversed. There will also be trials for a wholesale market venue that operates on an intermittent basis to improve companies’ access to capital before they publicly list.


The government will consult on bringing environmental, social and governance (ESG) company ratings providers under the regulatory net.

The ratings are widely used by investors for picking companies which tout ‘green’ credentials, but they are not regulated. The Financial Conduct Authority said it would encourage regulation focused on transparency, good governance, management of conflicts of interest, and robust systems and controls.


Prime Minister Rishi Sunak, when he was finance minister, called for a “Britcoin” or digital pound for faster payments.

The government will consult with the Bank of England in coming weeks on a digital pound for retail use.


(Reporting by Huw Jones;Editing by Elaine Hardcastle)

Recent Post: