Government sets out third phase of Smarter Regulatory Framework

Following its Smarter Regulatory Framework (SRF) delivery plan, Treasury has published a follow-up paper which sets out the progress made so far and the government’s approach to the next phase of the SRF programme.

As of February 2024, the government has:

• removed 44% of assimilated law (previously known as retained EU law) relating to financial services;
• made or laid statutory instruments to replace:
  • Solvency II regulations which would reform the capital requirements for insurers and create a regime tailored to the UK insurance market;
  • the Prospectus Regulation with a new framework for offers of securities to the public and admissions of securities trading on UK markets;
  • the Data Reporting Services Regulations;
  • the Securitisation Regulation;
  • the PSRs 2017, reforming framework contract termination rules and allowing PSPs to slow down certain payment orders where there are reasonable grounds to suspect they were made fraudulently;
• further committed to the Future of Payments Review recommendations to repeal EU rules for authentication and improve consumers’ ability to make purchases easily;
• commenced the repeal of legislation relating to:
  • the IMD and IDD to take effect on 31 March 2024 – most of IDD was already implemented via FCA rules so there will be no substantial policy change in this area;
  • the Electronic Money, Payment Card Interchange Fee and Payment Services (Amendment) Regulations 2023 which allows the FCA and PSR to make rules related to payments;
• published draft SIs for technical feedback that will replace:
  • the Short Selling Regulation;
  • the PRIIPs Regulation – this will be replaced with rule-making powers to allow the FCA to create a new UK retail disclosure framework and will be renamed as Consumer Composite Investments;
  • the Money Market Funds Regulation.

The government will lay the final legislation in due course when parliamentary time allows and subject to the feedback received.

The next tranche of the SRF programme will include:

• AIFMD;
• UCITS Directive;
• continuing with PSD reform;
• EMIR; and
• MiFID – Treasury will consider the MiFID Org Regs and provisions relating to transaction reporting.

The government will communicate its approach to the remaining assimilated law and any further phases to the SRF programme in due course.