Queen's Speech: Bill announced to strengthen financial services industry

In the Queen Speech on 10 May the Conservatives announced a new financial services bill, which includes regulation reforms to promote UK businesses' "growth and international competitiveness".

The annual speech outlined the government's legislative programme for upcoming parliamentary session, this time delivered by Prince Charles for the first time instead of the Queen. A spokesperson for Buckingham Palace said the Queen would not be attending due to "episodic mobility problems".

Among the 38 bills presented many of them focused on support for the UK economy in the face of the cost-of-living crisis.

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Aside from the measures regarding inflation management and regional inequalities, one new programme the government announced was The Financial Services and Markets Bill, which builds on the Financial Services Act 2021 and "delivers on the ambitious vision" for the financial services sector set out by the Chancellor last year, according to a HM Treasury release.

The release stated the Bill would "make the most of the opportunities of Brexit" and revoke EU law on financial services, replacing it with an "approach to regulation that was designed for the UK". It will also update the objectives of the regulators to "ensure a greater focus on growth and international competitiveness". 

The legislation will also reform rules around UK capital markets "to promote investment". 

John Glen, economic secretary to the Treasury, said Government are "reforming our financial services sector now we have left the EU to ensure it acts in the interests of communities and citizens, creating jobs, supporting businesses, and powering growth across all of the UK".

Following the announcement Hargreaves Lansdown called for "a better settlement for retail investors" to be included.

"From better access to IPOs to harnessing the opportunities of innovative technologies to allow firms to use data to better guide clients, this is an opportunity to update our rules for future," said Anne Fairweather, head of government affairs and public policy at the company.  

Meanwhile, Tom Selby, head of retirement policy at AJ Bell called on the government to "formally address concerns over the advice/guidance boundary". 

Banks forced to reimburse

The Bill will also require banks to reimburse scam losses on authorised push payments.

In a policy paper the government noted the payments industry and Payment System Regulator have created "better mechanisms" to reimburse victims, but said it remains "inconsistent" and victims continue to suffer losses. 

The Bill will give the regulator powers to force banks to compensate victims, with a mandatory reimbursement for anyone tricked into giving money. 

"The Government clearly does not think the banking industry's voluntary system for reimbursing fraud victims is doing enough, as it has announced plans to let the regulator force banks to compensate those scammed," explained Laura Suter, head of personal finance at AJ Bell. 

She went on to flag the latest figures from UK Finance show that for every £1 stolen only 43p was returned to victims. 

Online Safety Bill carried over

Elsewhere the Online Safety Bill was also carried over to this year's speech after been introduced last year.

"This Bill is the perfect opportunity to require search engines and social media platforms to remove sham investment and impersonation scams promptly from their sites, and conduct the necessary due diligence to stop them from appearing," explained Matt Burton, chief risk officer at Quilter.