Committee stage for FSM Bill to start on 22 June

The Financial Services and Markets Bill had its second reading in the Lords on 8 June and has now been scheduled for the Committee stage starting from 22 June.

At second reading, Lord Stockwood introduced the Bill for the Government, and outlined its key provisions. He noted that he had been asked by several of the Lords active in financial regulation to give assurances that the Bill will not weaken the core protections of the SMCR but said it would not – that it is not about deregulation but about ensuring rules operate in a more proportionate and targeted way.

Baroness Neville-Rolfe, following for the Conservatives, said she feared the Bill might not lead to the “step change” required to make the UK financial services marketplace more attractive and competitive but that it is moving in the right direction in several respects. She said that the Bill is missing the opportunity to address financial education, and queried the wisdom of giving the regulators powers to make significant changes but without certainty on what those changes would be. She also queried why there is still no firm direction on digital assets.

Lord Sharkey, for the Liberal Democrats, also focused on the fact the Bill contains significant reforms but little certainty in some areas, and also that, particularly in respect of the FOS reforms, it includes proposals for significant reform that were not previously consulted on.

Lord Burns supported principles-based legislation and said many of the changes proposed are a “sensible rebalancing”, while Baroness Hodge stressed the importance of tackling financial crime and the reform of the professional bodies which are broadly considered not to have supervised well enough, resulting in the proposed changes to give the FCA direct powers.

Baroness Bowles was also concerned about the safeguards the Bill could remove.

Other members of the Lords spoke on specific or general issues, including support for SMCR reform, concern over regulatory powers, queries on how ring fencing reform would work and how regulation in the future would address climate related risks.

A running list of amendments has been published in advance of the Committee stage.