| Link(s): https://www.gov.uk/government/news/chancellor-sets-out-ambition-for-future-of-uk-financial-services |
Context
The Chancellor, Rishi Sunak has outlined plans to bolster the dynamism, openness and competitiveness of the UK financial services sector following the UK’s departure from the EU. The Government has confirmed that its approach will be guided by what is right for the UK and for the financial services sector.
The plans include issuing the UK’s first ever Sovereign Green Bond, becoming the first country in the world to make TCFD-aligned (Task Force on Climate-related Financial Disclosures) disclosures mandatory, reviewing the UK’s listings regime to attract the most innovative firms, and leading the global conversation on new technologies like stablecoins and Central Bank Digital Currencies.
Key points to note
- Positioning the UK at the forefront of green finance
- To help the UK meet its 2050 net zero target and other environmental objectives the Government will issue its first Sovereign Green Bond to help finance projects which will tackle climate change, finance infrastructure investment and create green jobs
- The government will also introduce more robust environmental disclosure standards so investors and business can better understand the material financial impacts of the exposure to climate change
- The UK will make the TCFD-aligned disclosures fully mandatory by 2025. The upcoming rules and regulations will capture a significant portion of the UK economy and will include listed commercial companies, banks, building societies and insurance companies.
- The UK will also implement a green taxonomy to determine which activities can be defined as environmentally sustainable
- The UK also plans to join the International Platform on Sustainable Finance
- Extending the UK’s leadership in financial technology
- New technologies such as stablecoins – privately-issued digital currencies – could transform the way in which people store and exchange money thus making payments cheaper and faster
- The Government will propose a regulatory approach for relevant stablecoin initiatives to ensure that risks to consumers are managed and financial stability is maintained
- Equivalence and openness
- The Chancellor announced the publication of guidance setting out the UK’s approach to equivalence with overseas jurisdictions – a technical outcomes-based approach which prioritises stability, openness and transparency. More details can be found here: https://www.gov.uk/government/publications/hm-treasury-equivalence-decisions-for-the-eea-states-9-november-2020
- UK approach to regulation outside the EU
- The Government is undertaking a number of reviews to ensure regulation enhances the UK’s attractiveness to business and position as a global financial hub
- A taskforce will propose reforms to the UK listings regime to attract the most innovative and successful firms and help companies access the finance they need to grow
- The Government will also launch a call for evidence on the UK’s overseas regime to ensure it supports the UK’s position as an open global financial centre