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Inquiry into the Future of the UK's Financial Services Sector Post-Brexit

November 24, 2020, Covington Alert

On November 20th, the Commons’ Treasury Select Committee launched an Inquiry looking at the future of financial services regulation in the UK after departure from the European Union. In this alert we set out the scope of the Inquiry and how companies can contribute evidence that may influence the Committee’s findings.

The Committee is appointed by the House of Commons to examine the expenditure, administration and policy of HM Treasury, HM Revenue & Customs, and associated public bodies, including the Bank of England and the UK’s Financial Conduct Authority.

The Inquiry will examine how financial services regulations should be set and scrutinised by Parliament as EU legislation will cease to apply in the UK with effect from midnight on the 31st of December.

Although the Committee’s stated objective is to evaluate how best to use Brexit as an opportunity to amend and enhance the UK’s financial regulation regime, the conclusions will constitute a major overhaul of the monitoring and regulation of the UK’s financial services sector. This Inquiry therefore offers clients an opportunity to contribute to the restructuring and future focus, direction and methodology of the entire sector.

The Inquiry will evaluate how best to balance the need for new and effective legislation and oversight with a need not to constrain the sector through overly-heavy oversight or regulation; will set out how future legislation should be created and passed; and will advise what role Parliament should have either in passing new regulation or in scrutinising it.

On the international front, the Inquiry will consider how best to attract international incubators and Fintech companies to the UK; what the Government’s financial services priorities should be when it negotiates trade agreements with third countries; and whether and to what extent the UK should open its financial services market to competition from those third countries. The Inquiry will need to consider what skills the financial services sector will require and whether a new immigration policy needs to be considered to fill those skill needs if the sector assesses that there is inadequate domestic supply.

The Committee will also be under pressure to consider how best ensure the independence of the regulators; whether future regulators should be mandated to include public policy issue considerations in their statutory objectives; how they are funded; and the extent to which financial services regulation should be consumer focused.

Clients wishing to submit evidence can do so before 9 January 2020 at: https://committees.parliament.uk/submission/#/evidence/319/scope

If you have any questions concerning the material discussed in this client alert, please contact the following members of our Public Policy and Corporate practices.

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