As reported by JD Supra, the UK Financial Conduct Authority (FCA) began seeking public opinion on its proposed Rule Review Framework on July 14, 2023. This move comes in the wake of significant regulatory changes brought about by the Financial Services and Markets Act 2023.
The referenced act impulsively increases the power of UK regulators by transferring the responsibility for making detailed rules directly to them from the government. To safeguard the use of these new powers in practice, the FSM Act stipulates an enhanced regulatory accountability framework, subjecting the regulators to additional oversight by Parliament and HM Treasury.
The call for public comment by the FCA on its Rule Review Framework is a crucial part of these provisions as it adds a further layer of accountability. In its essence, the Framework serves as a tool for the FCA to review rules to ensure they meet the objectives set by the FSM Act.
The ongoing consultation, conducted by Shearman & Sterling LLP, demonstrates a significant step forward by the FCA in ensuring that UK financial regulations are dynamic and responsive to changes in the ever-evolving financial landscape. With the Rule Review Framework in place, the FCA aims to improve regulatory transparency, all while encouraging industry stakeholders’ active participation.
While the FCA tentatively proceeds in this new-age direction, law firms and corporations across the globe will be keenly watching key developments as they unfold. In the future, lessons from this experience may be instructive for other jurisdictions trying to strike a balance between regulatory prerogatives and the industry’s demand for clear, predictable, and transparent regulations.