Lucy Rigby, economic secretary to the Treasury and city minister in the current Labour government, has noted to an audience including representatives from the Luxembourg CSSF, ESMA, and the regulatory authority of Chile, that the UK is intent on both beefing up its cooperation with the EU’s regulatory agenda as well as carving out space for industry opportunities in the UK.
The comments came at the ALFI Global Asset Management conference taking place in Luxembourg, where Rigby outlined the key priorities of the UK regulatory agenda as it affects asset management.
The UK policy is driven by the need to foster a open, stable and competitive place where capital can be accessed, and to leverage this through good relations with other centres pursuing similar values and ambitions.
She stressed that in terms of cooperation, the UK sees Europe as it key relation partner, given the shared relationship meeting shared challenges. Examples of these include the green transition and defence spending. Asset management is an important factor in the roadmap, she suggested, and therefore brings focus on ensuring efficient cross border access, reducing barriers, improving efficient functioning of markets, and targeting improvements for end customers.
Private markets will be a key area of focus, she continued, citing the opportunity for the UK in the global trend that has seen some $16trn allocated this way globally thus far, according to her figures.
UK policy is to ensure risks are managed in such a way to improve access to private markets. She noted ongoing stress tests by the Bank of England relating to this area. And there UK is set to adjust its equivalent of AIFMD regulations, however she stressed that this was not about abolishing the regulatory regime, but finding efficiencies and improvements where possible.
Key points
The UK is looking at key principles to apply in regulating ongoing. These include a persistence of regulation, but with rules that flex with the growth of entities affected. There will also be a principle linked to business models; regulations should be implemented when needed rather than across the board she noted. This latter point may be of particular interest to smaller asset managers, although she did not say as much.
Consumer protection will continue to drive the UK governments approach also. The UK is targeting a retail investment culture, as the EU is through the Savings and Investments Union (SIU). Outlining what she described as a ‘targeted support’ policy – billed as the biggest change in the retail space – she said a nationwide communications strategy will shortly roll out across the UK, which will target retail investors with a message of reasons why they should invest.
Digitisation, through areas such as crypto and tokenisation, are firmly on the agenda, as she noted a strong funds ecosystem relies on clear rules.
Work will continue with Brussels and key financial centres such as Luxembourg around distribution questions. The UK’s Overseas Funds Regime (OFR) relies on ongoing dialogue to avoid the risk of duplicating jurisdictionally linked regulation. There is a “strong nexus” between London and Luxembourg, she said.
Source: Fund Europe
