It is crucial that the UK’s regulatory framework supports the positive contribution that the financial and related professional services industry makes to the UK economy and society. To do this it must enhance competitiveness, support the industry in trading with the world and exporting financial products and services to new markets, and attract investment into the UK.
The following regulatory principles are crucial to the ongoing success of the industry and its wider contribution:
- Clarity, coherence and predictability: Regulation should be easy for the industry and its users to understand, minimise business compliance costs, and inspire confidence in the UK market.
- Net positive impact: The benefits of regulation, and any changes to regulation, should outweigh the costs, and demonstrably so, with the full range of social and economic impacts considered.
- Proportionality: Regulation should, wherever possible, be proportionate to the risk involved.
- International alignment and competitiveness: Regulation should be aligned globally wherever possible. UK regulation should keep pace with global changes in regulation, to ensure the UK does not fall out of kilter with competitor jurisdictions, or international standards and best practice. It should also be developed with due consideration of its impact on the UK’s competitiveness compared to other jurisdictions.
- Tailored and agile: Good regulation should be tailored to the UK market, support the industry’s ability to compete internationally, and evolve to meet changing needs and international standards. The UK’s reputation and success as a global financial centre depends on high standards of regulation, and a stable and independent regulatory regime. We would not support any moves for a regulatory race to the bottom. This would negatively impact international confidence in the UK, making the UK less attractive to international business and investment. It is also worth noting that the UK’s financial services regulation is rooted in a wide range of international treaties and agreements.
Recommendation:
The government should deliver a regulatory framework which meets the above principles, is tailored to the UK market, and supports the UK’s standing as a leading international financial centre and a trusted place to do business and invest.