An Overview of the Financial Reformation Post-Brexit

In 2023, the United Kingdom will begin to unroll more comprehensive insights into the changes in financial services regulations post-Brexit. The significant and far-reaching adjustments were announced in what’s been termed the “Edinburgh Manifesto” on December 9. These changes cover a wide spectrum of issues including: 

• Further revisions to the MiFID (Markets in Financial Instruments Directive) regulations. 
• Adjustments to the certification and senior managers regime. 
• Affirmation of several directives in the preliminary Financial Services and Markets Bill. 
• The approaching consultation from HMT (Her Majesty’s Treasury) and the Bank of England on the concept of a UK retail Central Bank Digital Currency. 

Financial entities operating within the European Union will need to reconcile these changes with a variety of review actions and determine an optimal approach to the anticipated divergence between the two sets of regulations. 

Balancing Regulatory Changes and Consumer Duties 

Nevertheless, financial institutions should not let these changes distract them from their obligation to adhere to the FCA’s (Financial Conduct Authority) Consumer Duty. This regulation, effective from July 31, 2023, applies to both new and existing financial products or services available for sale or renewal. 

This rule necessitates financial institutions to reassess their product design and lifecycle to guarantee positive outcomes for retail customers. Despite being potentially demanding for financial establishments, this regulation becomes increasingly significant amidst the escalating cost of living, especially in supporting consumers who are more susceptible to financial volatility.