UK Mansion House 2025 and Financial Services Growth and Competitiveness Strategy: summary of key initiatives

‘Laser focus’ on UK as global location of choice for financial services firms

The Financial Services Growth and Competitiveness Strategy is a ten-year plan with a ‘laser focus’ on making the UK the global location of choice for both domestic and international financial services firms. As outlined by the Chancellor both at an industry summit in Leeds in advance of her Mansion House speech and in the Strategy, the government believes change is needed to deliver this vision, notably through the “Leeds Reforms” aimed primarily at:

• Regulating not just for risk, but for growth;
• Supporting the UK as the world’s most innovative global financial centre; and
• Unlocking retail investment.

The initiatives outlined in the Strategy are grouped across five areas of focus to achieve the vision.

Focus area 1: Delivering a competitive regulatory environment

With reference to the objectives of the government’s previously published Regulation Action Plan (see our article), key initiatives include:

Financial Ombudsman Service (FOS) reform

The government has published the outcomes of its review of the FOS and is consulting on modernising how the FOS assesses consumer complaints with the aim of ‘ending its present position as a quasi-regulator’. The FCA and the FOS have also published a joint consultation seeking views on proposals to modernise the redress framework, following their joint call for input in November 2024 (see our previous article).

The main points of the proposals are:

• Adapted test for the FOS to make decisions: The test that the FOS applies when making its decisions – namely that the decision should be “fair and reasonable” – will be adapted. Firms have expressed concern that they can be found liable by the FOS on the basis of this test even where they have complied with the relevant FCA rules in full. In future, the FOS will be required to find that a firm’s conduct is fair and reasonable where the firm has complied with relevant FCA rules, in accordance with the FCA’s intent for those rules.
• New framework for resolving ambiguity: A framework will be introduced which formalises the roles of the FOS and the FCA in providing regulatory certainty. Where there is ambiguity in how the FCA’s rules apply, the FOS will be required to seek a view from the FCA and the FCA will be obliged to respond. Where appropriate, a party to a complaint will be able to request that the FOS seeks the FCA’s view on interpretation of rules.
• New frameworks for wider implications issues and mass redress events: There will be:
  • A framework which provides clarity on the roles of the FCA and the FOS in relation to wider implications issues and mass redress events. The FOS will be obliged to refer potential wider implications issues or mass redress events to the FCA and the FCA will be obliged to consider those issues. Parties to a complaint will also be able to request the FOS refer such an issue to the FCA. It will be for the FCA to decide how those issues should be addressed.
  • A more flexible mass redress event framework. The FCA will be able to investigate and respond to mass redress events more easily, ensuring that, when needed, mass redress events can be considered and dealt with quickly and effectively, providing consistent outcomes for consumers and avoiding disruption to markets.
• Time limit for claims: There will be a 10 year longstop date for bringing complaints to the FOS. Under the current rules, complainants can bring a claim after more than 10 years, depending on when they become aware that they have a claim. The new 10 year longstop will avoid the risk of the FOS having to deal with a high number of historic cases.

The joint FCA/FOS consultation also includes a number of operational changes which are intended to streamline the processes, including a dedicated referral mechanisms to support the FOS when considering issues with wider implications or ambiguities, and tools which will allow the FCA to better manage mass redress events. The FOS is also making changes to its processes to improve consistency and transparency in its decision making.

At the same time as these proposals, the FOS has published a policy statement confirming its previous proposal to introduce a new standard interest rate for compensation awards. The new rate will track the Bank of England’s (BoE) base (average) rate + 1%. This contrasts with the FOS’s current approach of applying 8% interest on compensation awards.

Streamlining the Senior Managers and Certification Regime (SMCR)

HM Treasury (HMT), the PRA and the FCA have all published proposals to reform the SMCR, some of which had been trailed in previous speeches (including the previous Mansion House speech). The main points to note are:

• Overall, these changes are expected to reduce burdens on firms by around 50%. However, the underlying goals of the regime remain valid and firms may find that they have to do more if the regulators are doing less.
• HMT is consulting on removing the certification regime from the current statutory framework. This requires firms to regularly assess and certify that certain individual members of staff (below senior manager level) are fit and proper to perform their roles. However, the regime is not necessarily being abolished altogether; instead, the FCA and PRA will be able to use their rule-making powers to develop a more flexible and proportionate regime for regulating those individuals, and the FCA is already proposing to reduce the persons in scope of its regime.
• In relation to senior managers, HMT is consulting on removing certain elements of the regime that are contained in legislation and giving the regulators the flexibility to change the parameters of the existing regime. Changes resulting from that could include the regulators:
  • reducing the number of senior management functions that come within the regime;
  • waiving the need for the regulators to pre-approve appointees to certain roles, relying instead on firms to ensure fitness and propriety; and/or#
  • streamlining some of the administrative and documentary requirements that are part of the current regime (e.g. with regard to the Statements of Responsibility that are required for senior managers).
• The overall aim is to make the regimes more flexible and proportionate and to reduce unnecessary regulatory burdens on firms. However, until HMT has finished its consultation and the legislation is amended, some of the headline changes (known as “phase 2” changes) cannot be made.
• In the meantime, the FCA and PRA are consulting on some more modest changes that they can make to their own approaches without having to amend any legislation (so-called “phase 1” changes). These include improvements to their approval processes, such as allowing extra flexibility around certain temporary appointments of senior managers (by extending the ’12 week rule’). HMT and the regulators are also mindful of the need not to present inappropriate barriers to international talent becoming senior managers in the UK and are proposing changes or clarifications that are aimed specifically at addressing some of those barriers, including providing more guidance on the role of the group entity senior manager, which is extended to include controllers.
• All three of the consultations close on 7 October 2025. It is likely that the Phase 1 changes can be put into effect relatively swiftly after that date. The more substantial changes under Phase 2, however, will have to wait until legislative amendments are made and are then expected to be the subject of further consultations. Sensibly, the regulators are not proposing that firms have to make two sets of adjustments, so they can choose to wait until the Phase 2 reforms are made.

Reviewing application of Consumer Duty to wholesale firms

The Chancellor has asked the FCA to report back to her by the end of September this year on how it plans to address concerns about the scope and application of the Consumer Duty for asset managers and other firms primarily engaged in wholesale activity.

The FCA will test its plans for any changes with market participants, industry and consumer groups before reporting back to the Chancellor.

So-called provisional licences or “L-Plates” for innovative start-ups

In Autumn 2025, the government plans to consult on a new authorisation regime which would allow such firms to conduct limited regulated activities with streamlined conditions.

Tailoring the capital framework for banks / Recovery and resolution

Key relevant initiatives are:

• MREL and MREL reporting

The BoE has proposed to increase the indicative asset threshold for MREL from a range of £15 billion-£25 billion, to £25 billion-£40 billion (although there has been no change to the transactional account threshold which will remain at 40,000-80,000 accounts). Firms:

• below the indicative thresholds can generally expect to be a modified insolvency firm, unless the risks of their entry to resolution are unacceptable, in which case a stabilisation power resolution strategy would be adopted;
• within the revised total assets thresholds range can generally expect to be set a transfer or bail-inpreferred resolution strategy , depending on the BoE's assessment of what would be most appropriate to achieve the special resolution objectives; and
• above the £40 billion threshold can generally expect to be set a bail-in preferred resolution strategy.

Any firm or group forecasting that its total assets will, for the first time, exceed either £25 billion or £40 billion or that it will exceed 40,000-80,000 transactional accounts, in each case in the following three years, must inform the BoE at which point the BoE will determine whether the preferred resolution strategy is transfer or bail-in. Where a transfer preferred resolution strategy is set, the BoE will provide a notice period of no more than three years after which the firm will become a transfer firm. Where bail-in is the preferred resolution strategy, the BoE will determine an appropriate transitional period (“T”). Firms will generally then have at least six years following T (with scope for a flexible add-on of two years if circumstances require it) to reach their end-state MREL.

Transfer firms should expect to not be required to maintain any MREL beyond the amount they already hold to meet their Minimum Capital Requirement (MCR) and bail-in firms should expect to be set an MREL of two times their MCR.

In addition to amending its approach to setting MREL requirements, the BoE is proposing changes to its Pillar 3 MREL disclosures, (requiring greater granularity of disclosure), and changes to its the content of its MREL reporting requirements, with additional reporting templates, depending on the size of institution.

• Changes to Basel 3.1 implementation

On the same day, the PRA announced changes to its plans to implement Basel 3.1 following Europe’s announcement that it would delay implementing Basel 3.1’s changes to the market risk framework (known as the Fundamental Review of the Trading Book) until 1 January 2027. The PRA has now proposed to delay the implementation of the new internal model for market risk by an additional year to 1 January 2028, although it has confirmed that other elements of its Basel 3.1 implementation are still to go ahead on 1 January 2027.

• Ring-fencing reform

Working with the BoE, HMT will carry out a short review of the ring-fencing regime, encompassing both the legislation and the PRA rules and how they interact. Options for consideration will be:

• Allowing ring-fenced banks to provide more products and services to UK businesses;
• Addressing inefficiencies in how ring-fencing is applied to banking groups; and
• Examining the case for allowing banks to share resources and services more flexibly across the ring-fence.

A report to the Economic Secretary to the Treasury will be made by early 2026 with a view to legislating to take any reforms forward subject to Parliamentary time.

• More agile approach to banks using internal models for credit risk

Among other things, the PRA intends to publish a discussion paper later in July to explore ways to address the barriers to model approval that mid-sized firms may encounter, without compromising safety and soundness.

• Financial Policy Committee (FPC) review of bank capital

There will be an FPC-led review into optimal capital levels for UK banks to ensure delivery of resilience, growth and competitiveness, with an update to be provided in its Q4 Financial Stability Report (due on 2 December 2025).

• Recovery and resolution

While not specifically referred to in the Strategy, on the same day the PRA published proposals to adjust its recovery and resolution frameworks, such that:

• Small Domestic Deposit Takers (SDDT) (non-systemic banks focused on domestic activity with less complicated business models that hold no more than £20 billion in total assets on a three year rolling average) and their consolidation entities will be required to review their recovery plans every two years instead of every year, reducing burden and supporting better quality planning and complementing earlier proposals that relate to the SDDT’s ILAAP and ICAAP internal review process; and
• Only firms that have retail deposits equal to or greater than £100 billion, instead of £50 billion, will be required to carry out an assessment of their preparations for resolution and submit a report of their assessments of their resolution plans to the PRA periodically (as required by the PRA) at which point the BoE will also publish a public statement on the resolvability of the firm. This is intended to enhance the proportionality of the resolution regime while still ensuring that the very largest firms whose size and complexity mean their failure could pose the greatest risk to the UK remain subject to more extensive reporting and disclosure requirements on their resolvability.

As explained by the BoE in an accompanying press release, the above assortment of consultations and proposals are intended to promote banking resilience, capital certainty, competition and growth.

Mortgage lending measures

While not specifically referred to in the Strategy, the Chancellor’s Mansion House speech, a Leeds Reforms press release and a separate press release focusing on home ownership outline various initiatives to help mortgage borrowers:

• The PRA and the FCA have already recently confirmed changes to the rules and guidance relating to the loan to income (LTI) flow limit in mortgage lending to provide that if lenders lend over £150m (up from £100m) in a year, only 15% of their book can exceed 4.5% with effect from 11 July 2025.

With immediate effect, the BoE is allowing more lending at over 4.5 times a borrower’s income. This follows the FPC’s recommendation that the PRA and the FCA allow lenders to issue high LTI mortgages at more than 15% of their annual business, while maintaining the aggregate or overall flow limit across the sector. The PRA is therefore conducting a separate review. While the review is ongoing, the PRA is offering a modification by consent that will allow lenders to disapply the 15% limit with immediate effect.

FCA solo-regulated lenders should refer to the FCA note accompanying FG25/4: 'Amendments to PRA Rulebook and FCA Guidance concerning the de minimis threshold for the Loan to Income flow limit in mortgage lending', which says lenders can “contact the FCA to discuss the possibility of individual guidance in respect of the LTI flow limit, where appropriate”.

• Simplified mortgage lending rules on which the FCA has recently consulted and issued a discussion paper, and in relation to which a policy statement is due in Q3 2025.
• There is now also a permanent Mortgage Guarantee Scheme, the details of which were released as part of the Mansion House publications.

Focus on priority growth opportunities

As well as cross-sector changes, the Strategy also sets out the government’s intention to focus further regulatory change on the five ‘priority growth opportunities’ set out in the government’s previous call for evidence. Of those five opportunities, the spotlight is currently on asset management and wholesale services, insurance and reinsurance and sustainable finance.

• Asset management and wholesale services

The government’s three core objectives for asset management will be:

• Placing portfolio management at the heart of policymaking;
• Making the UK a world leader for managing private markets assets, including work to streamline the Alternative Investment Fund Managers Regulations (with the next phase of work due in early 2026) and an ‘ambitious package of reforms’ for venture capital fund managers; and
• Delivering a future-proofed regulatory regime for asset management and championing innovation, including the development of tokenization, AI, changing demographics and shifting consumer demands (including through the FCA’s consultation on the direct-to-fund model).

For wholesale services, reforms include the planned FCA report on application of the Consumer Duty to wholesale firms (see above) and publishing a Wholesale Financial Markets Digital Strategy (see below).

• Insurance and reinsurance markets

In the face of strong overseas competition, the government’s objective is to make the UK the location of choice for (re)insurance, specifically complex and specialty insurance. It intends to support the insurance sector by streamlining the regulatory burden faced by insurers, including:

• Streamlining the product governance and fair value requirements for insurance firms.
• Reforming conduct requirements for commercial and bespoke insurance business, supporting the FCA to remove unnecessary consumer protections when insurers serve large or specialist customers. This is an area the FCA has been looking at since July 2024 when it published a discussion paper on the regulation of commercial and bespoke insurance business. More recently, the FCA published a consultation paper on simplifying the insurance rules which covers elements of the discussion paper. The consultation closed on 2 July and a policy statement is due at the end of 2025.
• Introducing a streamlined regulatory approval process for Lloyd’s of London managing agents, working with the Society to reduce the timeframe for authorisation.

In addition, the government is:

• Consulting on a more flexible risk transformation regime which includes reforming the UK’s insurance linked securities offer to ensure that insurance for evolving risk (e.g. climate and cyber risks) can access funding through capital markets. It also considers the possibility of allowing protected cell companies to operate as insurers. A consultation paper has been published; the deadline for responses to the consultation is 8 October 2025. The PRA consulted on changes to the ISPV regulatory framework last year and a policy statement is awaited; implementation of the PRA’s changes is expected to be in H2 2025.
• Delivering a new tailored regime for captive insurance – a consultation response paper following HMT’s consultation on introducing a captive insurance regulatory framework has been published. The PRA and FCA are working on regulatory proposals and published a joint announcement committing to developing a proportionate authorisation and regulatory regime. But the PRA/FCA are not expected to consult on proposals until summer 2026 – with implementation in mid-2027. The government expects that the new regulatory rules to create a bespoke captive regime will include proportionately lower capital and reporting requirements and enable faster authorisations.
• Championing the industry – the government, together with Lloyd’s of London, will deliver in the autumn an ‘international event’ to showcase the London Market’s strength and expertise.

The Strategy paper makes no mention of the government’s long awaited plan to introduce an Insurer Resolution Regime.

• Sustainable finance

The Strategy paper highlights the opportunity that increased demand for sustainable finance brings for the UK and reiterates the government’s commitment to maintain the UK’s position as global leader in sustainable finance, including attracting business and mobilising capital towards emerging markets and developing economies.

The government sets out the next steps in its plan to “stabilise a streamlined regulatory framework for sustainable finance, prioritising efforts on policies that will have the greatest impact”. It also highlights links to the government’s action to mobilise private finance through the National Wealth Fund and Great British Energy as well as supporting delivery of a skilled workforce through the Sustainable Finance Education Charter. Notable updates announced in the Strategy paper are that the government is:

• Consulting on proposed next steps on the UK Sustainability Reporting Standards (UK SRS), the assurance of sustainability reporting, and how best to take forward the manifesto commitment on the development and implementation of transition plans that align with the 1.5°C goal of the Paris Agreement. Following the announcement of the consultations on these topics on 25 June 2025, the government confirmed that further publications will follow, including from a consultation from the FCA on how listed companies will adopt the UK SRS and work from the Net Zero Council on supporting SMEs to decarbonise.
• Building UK companies’ capacity on nature through the UK Consultation Group of the Taskforce on Nature-Related Financial Disclosures.
• Ensuring that the FPC and Prudential Regulation Committee under the BoE support the government’s approach to the net zero transition. The PRA is currently consulting on enhancing banks’ and insurers’ approach to managing climate-related risks and the government has taken other steps to ensure these committees and the FCA continue to support sustainable finance.
• Supporting the growth and integrity of the transition finance market and voluntary carbon and nature markets. The government has confirmed that it will respond to the consultation on voluntary carbon and nature markets later this year.
• Regulating Environmental, Social, and Governance (ESG) ratings providers. We can expect to see secondary legislation by the end of 2025 to regulate ESG ratings providers (following on from a UK voluntary code of conduct which is already in place).
• Not proceeding with the development of a UK Green Taxonomy. It has been confirmed that a UK Green Taxonomy will not be developed as the consultation on the value case for the UK Green Taxonomy confirmed that other policies were of higher priority. HMT published a response to the UK Green Taxonomy consultation here.

Focus area 2: Harnessing the UK’s global leadership in financial services

Initiatives include:

• Investing in relationships with emerging markets including China, India and the Gulf;
• Facilitating greater market access through Free Trade Agreements with tailored financial services provisions as well as ‘more innovative, bespoke’ treaties such as the Berne Financial Services Agreement (signed in December 2023 and due to be implemented by the UK by the end of 2025 with the relevant legislation to be laid in July);
• Encouraging overseas firms to invest and trade in the UK economy by establishing a new dedicated concierge service, the Office for Investment: Financial Services and publishing a guidance document setting out the details of a new harmonized approach to the UK’s regulatory recognition of overseas jurisdictions (Overseas Recognition Regimes – ORRs);
• The government working with the new Defence Investors’ Advisory Group to examine the entire spectrum of defence companies with a view to the Group providing recommendations to the Defence Secretary on how barriers to defence financing can be removed while making the sector more attractive for private investment;
• The government using its international networks to support the UK’s position as a global sustainable finance hub, and building on the Transition Finance Market Review (TFMR).

Focus area 3: Embracing innovation and leveraging the UK’s Fintech leadership

To achieve the aim of the UK being the world’s most technologically advanced global financial centre and remaining a leading jurisdiction for Fintechs to start up, scale and list, initiatives include:

Payments and e-money

In the context of the National Payments Vision (NPV) (see our previous article):

• The government taking forward work to modernise and future-proof the payments and e-money legislative framework, including responding to developments in tokenised payment instruments (e.g. stablecoin).
• In September 2025, the government publishing a consultation on the consolidation of the PSR within the FCA.
• Via the Payments Vision Delivery Committee (PVDC), establishing an innovative new model to design and deliver the next generation of retail payments infrastructure as set out in this HMT policy paper and BoE statement. In outline:
  • In Autumn 2025, the PVDC will publish its strategy for retail payments infrastructure.
  • The strategy will inform the work of a new Retail Payments Infrastructure Board (to be set up and chaired by the BoE with broad representation across the ecosystem), a new Delivery Company (an industry-led entity focused on procuring and funding the next-generation infrastructure) and Pay.UK (which will retain its critical role as operator of the existing interbank payment systems).
• In accordance with the NPV, publication by the PVDC of a Payments Forward Plan by the end of 2025, setting out a ‘sequenced plan’ of initiatives across the payments ecosystem including in relation to retail and wholesale payments, and the role of digital assets. The PVDC will work with the Vision Engagement Group over the coming months as it develops its strategy for retail payments infrastructure and the Payments Forward Plan.

Artificial Intelligence (AI)

• The government working with industry, UK Research and Innovation (UKRI) and Innovate UK to identify the best opportunities to increase AI research and development funding into financial services.
• The appointment of an AI Champion in financial services, focusing on the priority growth opportunities of asset management and wholesale services, insurance and reinsurance, and capital markets including retail investment and with an eye to improving consumer outcomes.
• The Regulatory Innovation Office (RIO), working with the Digital Regulation Cooperation Forum, will create a new one-stop shop for digital regulatory guidance to help firms – including AI innovators – better navigate all available resources.

Smart data and Open Finance

• Up to £12 million of investment in UK Data Sharing Infrastructure Initiatives from April 2026, with financial services firms being able to adopt these approaches and receive guidance, thereby lowering costs and improving their ability to harness data from different sectors;
• Launch of an FCA Smart Data Accelerator to facilitate the testing of Open Finance use cases as well as encouraging the development of solutions and helping shape the relevant regulatory policy;
• The government working closely with the FCA to set out their Open Finance roadmap by March 2026.

Digital ID

• Using the legislative framework for personal digital ID established by the recently enacted Data (Use and Access) Act 2025 to enable the widespread adoption of digital ID to reduce fraud and compliance costs.

Fintech start-ups

• The launch by the FCA and PRA of a Scale-Up Unit to enhance engagement with fast-growing, innovative regulated firms, with further details to be announced in Autumn 2025;
• A new, streamlined authorisation regime for innovative start-ups (see above).

Financial inclusion/Digital exclusion

• In a nod to financial inclusion/digital exclusion considerations, there is also reference in the Strategy to the government’s continuing commitment to working with industry on the roll-out of 350 banking hubs across the UK by the end of the current Parliament.

Focus area 4: Building a retail investment culture and delivering prosperity through UK capital markets

The government’s priorities are to:

• Address long-standing risk aversion to retail investment by:
  • Working with the FCA to roll out targeted support once finalised following the current FCA (see our article) and HMT consultations (both closing on 29 August 2025) by ISA season 2026 (i.e. next April);
  • Supporting an industry-led multi-year, multi-channel campaign to promote the benefits of retail investment to consumers, with the idea of moving towards informing rather than warning consumers about those benefits and the risks;
  • Moving Long-Term Asset Funds from the Innovative Finance ISA to the Stocks & Shares ISA from April 2026, allowing more people to access longer-term investment options. It should also be noted that, as stated in the Leeds Reforms press release, the government isn’t ruling out further reforms to ISAs and savings to ‘achieve the right balance between cash savings and investment’.
• Ensure UK capital markets support British businesses to grow and invest by:
  • Implementing a new public offers and admission to trading regime. The FCA has published its final rules to implement the new Public Offers and Admissions to Trading Regulations 2024 (POATRs) which came into force in January 2024. The new rules will replace the current UK prospectus regime when they take effect on 19 January 2026 and are designed to enhance the UK markets’ competitiveness by reducing costs for companies to raise capital in the UK and encouraging greater retail participation. Whilst most of the prospectus requirements will remain the same for IPOs, there are some notable changes, including an increased threshold at which a prospectus is required for further issues of already admitted securities from 20% to 75% (and up to 100% for equity securities issued by closed ended investment funds); a new concept of ‘protected forward looking statements’ in prospectuses subject to an amended liability regime; and a new climate-related disclosure rule for certain equity issuers. In addition, there will be a single disclosure standard for non-equity securities based on the current rules for wholesale non-equity securities and alleviations for certain plain vanilla listed bond issuances in order to encourage more retail participation in the corporate bond markets.
  • The FCA's final rules are set out in ‘Policy Statement (PS 25/9) – New rules for the public offers and admissions to trading regime' which includes the new Prospectus Rules: Admissions to Trading on a Regulated Market (PRM) sourcebook and amendments to the Market Conduct sourcebook for firms operating primary multilateral trading facilities (MTFs). The FCA has also published ‘Policy Statement (PS 25/10) – Final rules for public offer platforms' which sets out its rules on the new public offer platform on which companies will be permitted to make larger ‘off-market' offers of relevant securities of £5 million or more to a broad range of investors without being required to produce a prospectus. The final rules in PS 25/10 create the new regime for public offer platform operators which will apply to all firms who hold the FCA permission to carry out this new regulated activity.
  • Delivering an ongoing programme to implement reforms to wholesale markets, with an update published by the FCA. This includes plans to review the securitization rules in Q4 to: (i) identify areas that could be simplified; and (ii) remove barriers to issuing and investing ahead of finalizing rules in H2 2026.
  • Providing the Private Intermittent Securities and Capital Exchange System (PISCES), which the FCA opened to applications for new PISCES operators in June 2025.
  • Following on from the publication of draft reforms to the regulatory regime for central counterparties (CCPs), continuing to review and reform the MiFID framework with the FCA, reforming the Benchmarks Regulation to reduce burdens on UK firms, prioritizing reforms to over-the-counter (OTC) derivatives in the European Market Infrastructure Regulation (EMIR), and publishing an FCA engagement paper on potential reforms to the market risk framework for the Investment Firms’ Prudential Regime (IFPR) by the end of 2025 with a consultation in 2026.
  • Establishing a Listings Taskforce to support businesses in listing and growing in the UK.
• Drive forward the digitalisation of UK markets by:
  • Publishing a Wholesale Financial Markets Digital Strategy (WFMDS), outlining how the UK plans to drive forward the digitalisation of its wholesale financial markets by driving efficiency and automation, adopting blockchain/distributed ledger technology (DLT) and other technologies such as AIand appointing a Digital Markets Champion to lead and deliver digitalisation and work with industry leads from other jurisdictions to develop a global approach. In particular, the government is committed to removing paper from the UK wholesale markets and working with industry to identify paper processes across asset classes such as bonds and establish how they could be dematerialised.
  • Publishing and responding to the final report of the Digitisation Taskforce. The Strategy notes that the government has accepted the report’s recommendations for a staged approach to removing paper share certificates and moving to a fully intermediated system of shareholding in the UK by the end of 2027.
  • Issuing the first remit letter from the Chancellor to the Financial Market Infrastructure Committee of the BoE, confirming that the BoE should focus in particular on facilitating innovation in its regulation of FMI firms, welcoming its consideration of the role of stablecoins in the Digital Securities Sandbox and encouraging the BoE to demonstrate international leadership.
  • Providing an update on the government’s plans for the digital gilt instrument (DIGIT) Pilot, including further features that aim to be tested such as delivering on-chain settlement, enabling the settlement of OTC transactions, interoperability and transparency. The government plans to set out further details on the pilot over the summer.

Focus area 5: Setting the UK’s financial services sector up with the skills and talent it needs

The government’s interventions in this area are focused on attracting the best global talent and working in partnership with the sector to deliver skills for the future. The Strategy also emphasises the importance of workforce diversity in supporting the growth of the financial services sector.

What’s next?

The government plans to report annually on progress on delivering the Strategy, as part of which it will set out the next policy steps on the five areas of focus.

If you would like to discuss any aspect of the Strategy or related financial services regulatory developments, please feel free to get in touch with one of the listed people or your usual Hogan Lovells contact.

Authored by Virginia Montgomery, Dominic Hill, Charles Elliott, Kirsten Barber, Danette Antao, Margaret Kemp, Isobel Wright, Emily Julier, Sinead Meany.