On 14 November 2024, the Chancellor of the Exchequer, Rachel Reeves, delivered her first Mansion House speech.

The headlines from the speech include that the government will:

  • Publish in the Spring the first ever Financial Services Growth and Competitiveness Strategy.
  • Review the strategic guidance that is given to the Competition and Markets Authority and other major regulators to underline the importance of growth.
  • Issue new growth-focused remit letters to the FCA, Prudential Regulation Committee, Monetary Policy Committee, Financial Policy Committee, and the Payment Systems Regulator.
  • Launch, in partnership with industry and the City of London Corporation, a Transition Finance Council alongside the City of London Corporation.
  • Publish the interim report of the Pensions Investment Review and plans to create Canadian and Australian style “megafunds” to power growth in the economy.
  • Not be reversing Brexit or re-entering the single market or customs union but will seek to reset its relationship.
  • Be publishing its National Payments Vision which will include action to progress open banking.

Ms Reeves also notes in the speech that:

  • While the Senior Managers and Certification Regime (SMCR) has helped to improve standards and accountability some elements of it have become overly costly and administratively burdensome. HM Treasury, the FCA and the PRA will shortly publish the outcomes of the review into the SMCR including a commitment to consult on removing the current Certification Regime from legislation.
  • The PRA have acknowledged post-crisis pay structures made the UK an international outlier on deferral arrangements and the government will support their intention to consult on reducing the length of pay deferrals helping firms to attract and retain talent.
  • The government looks forward to seeing the outcomes of the FCA’s Handbook Review as regulatory requirements could be streamlined.
  • The FCA will shortly consult on transformational changes to financial advice and guidance to ensure that people get the right support.
  • The FCA and the Financial Ombudsman Service have developed a new agreement which sets out clearer expectations on how they cooperate including on historic market practice and mass redress events. A joint Call for Input will be published very soon.

Jonathan Herbst commented:

“The proposed changes to streamline the Ombudsman process will be widely welcomed in the industry. A robust and efficient consumer redress structure is key, but it is fair to say that the lack of predictability of Ombudsman decisions and the limited use of collective redress mechanisms have historically placed a significant burden on firms.

“So, for most in the industry, it is not about giving less compensation if things do go wrong but rather about making the whole process more efficient and predictable. Anything that helps with this can only be welcome.

“It will be interesting to see what the certification regime reforms look like. The City has accepted the concept of fit and proper assessment for many years for customer facing staff and risk takers, so the basic concept is not in dispute. The complaint has sometimes been around the bureaucracy that can be involved in complying with some of the rules. As always, the devil will be in the detail of any reforms, with a balance to be struck between making sure that ‘bad apples’ do not come back into the industry and meeting the need to streamline processes.”