HM Treasury Policy Statement on Prudential Standards for Investment Firms in UK Financial Services Bill

HM Treasury has published a policy statement on its proposals for the prudential standards in the U.K.'s upcoming Financial Services Bill. The Financial Services Bill will set out a proposed regulatory framework for the financial services industry following the U.K.'s exit from the EU. The U.K. has historically wished and repeatedly sought to impose higher capital requirements on banks and investment firms than the EU has accepted, in part driven by the better capitalization of U.K. banks compared to some EU institutions. The new policy statement establishes four overarching principles which will govern HM Treasury's approach to prudential standards: (i) financial stability and high international standards; (ii) supporting growth, competition and competitiveness; (iii) giving U.K. regulators a central role in designing technical prudential requirements; and (iv) flexibility, allowing the U.K. to maintain its relationship with the EU and take account of U.K.-specific requirements.

HM Treasury intends to ensure that the Financial Services Bill: (i) completes the U.K.'s implementation of the remaining Basel III standards; and (ii) establishes a new prudential regime for U.K. investment firms that will mirror the EU's Investment Firms Regulation and Investment Firms Directive.

View HM Treasury's Policy Statement.

View details of the EU Investment Firms Regulation and Investment Firms Directive.

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