On 8 July 2021, the International Regulatory Strategy Group (IRSG) published a report that considers some of the options and competitiveness levers that the UK could use to remove perceived barriers to overseas firms and make its approach to market access clearer and more coherent. The report builds on the IRSG’s interim report on the UK regime for overseas firms that was published in November 2020 and has four chapters covering:
- The regulatory perimeter for cross-border business.
- Regimes for cross-border access.
- Regulation of branches of overseas firms.
- Equivalence-based regimes.
A number of law firms helped produce the report including Norton Rose Fulbright LLP which led the chapter that focuses on the future UK regulatory regime for branches of overseas firms. In this chapter the IRSG identifies four discrete areas where the regulatory regime for UK branches could be improved. They are:
- A clearer and more transparent framework relating to the approach of UK regulators to the division of responsibility between home state supervisory authorities, and the UK regulatory authority/ies (i.e. the scope of “deference”).
- Establishing a process which the UK regulator(s) should adopt when making assessments of the home state legal, regulatory and supervisory regimes which may be set out in statute, or may be achieved through other means.
- Amending the UK regulators’ “have regard to” factors to introduce a requirement that they “have regard to” the attractiveness of the UK as an inward investment destination, innovation and applicable international standards.
- Simplifying and improving the navigability of the regulatory requirements applicable to UK branches of banks, investment firms, payment service providers and other firms providing services to UK consumers or retail clients (e.g. non-bank consumer credit lenders etc.).
