Mansion House: HMT consultation on cross-cutting reforms in the UK regulatory environment

HM Treasury (HMT) has published its consultation paper on cross-cutting reforms in the UK regulatory environment in relation to key performance indicators, principles and strategies to be applied by the UK Financial Conduct Authority (FCA) and the UK Prudential Regulatory Authority (PRA). For application determinations, HMT proposes shortening the statutory timeframes for new firm authorisations and variations of permission from: (i) 6 months to 4 months for complete applications; (ii) from 12 months to 10 months for incomplete applications; and (iii) for SMCR approved persons applications from 3 months to 2 months. The consultation also covers the UK government's intention to consult on a proposal for streamlined authorisation conditions for innovative start-ups (also referred to as giving provisional licences or "L-plates") and to legislate to require the FCA and PRA to set out long-term strategies in line with an amended "have regard" framework in relation to regulatory principles and the relevant remit letter. The deadline for responses is 9 September.

Also on 15 July, both the FCA and PRA have confirmed in letters to the chancellor their support for the shortened timeframes and their commitment to both statutory and voluntary targets (as specified in the respective letters). The FCA also published a new support services webpage for UK and international firms, signposting access to guidance and tools to help them navigate the authorisation process and meet regulatory expectations more efficiently.

Separately, the consultation confirms that the government recognises the challenges faced by asset managers and other wholesale business firms when considering how to apply the consumer duty to products and services which do not directly involve retail customers. Consequently, the chancellor of the exchequer has requested that the FCA report by 30 September on how it will address the concerns of these types of firms in terms of applying the consumer duty in respect of wholesale business with distribution chains impacting retail customers. The FCA is tasked with testing its plans with market participants, industry and consumer groups.

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