Registry round-up

Following the UK Chancellor’s recent Mansion House speech, HM Treasury have published a document entitled ‘A new chapter for financial services’ that lays down, in broad terms, some of the measures the UK government plans to take on a range of matters to help the UK financial services sector evolve and thrive.

The plans are split into four key areas:

• An open and global financial hub
  The government have attempted to achieve this through their partnership with Singapore, the work with the US on the Financial Regulatory Working Group, granting packages of equivalence decisions across regulations for EEA countries and legislation to meet G20 commitments. They plan further measures which will include delivering an agreement with Switzerland and promoting high international standards on financial stability, innovation, and sustainability. Looking forward, HMT are looking to make further equivalence assessments and decisions in relation to other jurisdictions and increase relationships with large emerging markets including China, Brazil, and India.
  
  
• A sector at the forefront of technology and innovation
  HM Government continue to focus on cementing the UK’s reputation as global hub for fintech by responding to the recommendations of the Kalifa Review (which looked at the UK FinTech industry). As a result, the government has started to assess the case for a new form of money (we await with interest what this will be) and have established the Bank of International Settlements UK Innovation Hub. There are plans to develop a new sandbox to promote technological change for financial market infrastructures. HMG is keen to harness new technologies such as cryptoassets and stablecoins, while protecting access to cash through legislation. This is reflected in a long-term vision for UK payments networks.
  
  
• A world-leader in green finance
  The government have committed to making disclosures aligned with the Taskforce on Climate-Related Financial Disclosures (“TCFD”) mandatory by 2025 – with most in place by 2023 (for more information see the below item and see our item on Corporate Reporting in the April Registry Round-up). The Green Financing Framework sets out how ‘Green Gilts’ will finance those projects designed to tackle climate change.
  
  The financial services sector will be asked to commit to net zero emissions, combat greenwashing, and improve disclosures on how they manage risks – and opportunities in line with commitments made on climate change. These disclosures will improve the ability of Investors to judge the environmental impacts of their investments.
  
  
• A competitive marketplace promoting effective use of capital
  To date, the government have taken the first steps in amending the country’s regulatory regime since leaving the EU by introducing the Financial Services Act 2021. They commissioned Lord Hill’s review on the listing regime and accepted all the recommendations.
  Further plans include a further regulatory framework review with a consultation due in the autumn of 2021. They intend to consult on reforms to the prospectus regime, the capital markets regime, and the prudential regulatory regime for insurance firms.
  
  

CPU’s View

We welcome the government’s plans for the future of the financial services sector which will, as we have seen from Lord Hill’s review, affect the equity markets. But the government have continued to be silent on the introduction of dematerialisation, having taken the active decision to remove such requirements from their onshoring of the Central Securities Depositary Regulation. As Ireland begin the work to introduce dematerialisation along the lines of the published industry model that was devised in 2014 by issuers, registrars and other market participants, the UK stands still. And without action, the UK will become one of a very few markets in the world without a fully dematerialised market structure. The optics are difficult to reconcile.

As one of Computershare’s final acts as Chair of the Registrars Group, we ramped up the lobbying efforts that have been ongoing with BEIS and HMT by expressing our concerns directly to the Secretary of State, believing that full-market dematerialisation, achieved in an appropriate way, has the potential to delivery long-term benefits to all market participants including issuers and investors.