UK Financial Services Minister Bim Afolami emphasized on Wednesday that Britain might intensify efforts to ensure regulators consider the financial sector’s needs more closely, provided the new competitiveness remit is not adequately applied.
Regulators are scheduled to provide an update on the implementation of this remit in the upcoming months.
During a speech at a UK Finance event, Afolami remarked, “Be assured, we will go further if needed, if things are not developing in the way that we would all like to see.”
Afolami and Finance Minister Jeremy Hunt have expressed concerns about the Financial Conduct Authority’s (FCA) controversial approach of publicizing the names of companies under investigation early in the process, rather than post-investigation.
Hunt highlighted that this practice seems at odds with the FCA’s mandate to enhance competitiveness, a view that has resonated with significant backlash within the financial community.
Responding to the controversy, the FCA disclosed plans to introduce a “public interest” test that might precede the public naming of companies, aiming to balance regulatory transparency with industry concerns.
Afolami also touched upon the sentiment within the financial sector, noting a persistent perception of regulators as overly cautious. However, he mentioned that time would be given for regulators to demonstrate a shift towards a more balanced approach.
Post-Brexit, the UK has been reviewing its financial regulations to strengthen London’s position as a global financial hub, now more isolated from European markets.
Afolami highlighted ongoing efforts to diverge from EU regulations where necessary to maintain and enhance the UK’s unique position in the global financial landscape.
Significant initiatives, such as the “Edinburgh Reforms” and the “Mansion House Compact,” have been introduced to facilitate easier listing processes and encourage pension funds to invest in unlisted growth companies.
These measures are designed to make London a more competitive financial center against global rivals like New York and Singapore.
Afolami clarified that while these reforms are crucial, mandating pension fund investments in specific sectors would not be pursued.
Moreover, Afolami recognized the need to address the decline in retail investor participation in capital markets over the last decade and a half.
He noted that there is substantial interest from companies eager to list in London, suggesting a positive shift in the city’s financial dynamics.
“We’ve really sort of turned a corner,” Afolami concluded, reflecting optimism about London’s evolving financial landscape.