On 15 June 2022 HM Treasury published the outcome to its consultation on amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). The changes to the MLRs will be implemented through the Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations 2022 Statutory Instrument. A draft of the Statutory Instrument and explanatory memorandum have also been published. The amendments bring the MLRs in line with updated FATF standards and fill gaps in the current operation of the UK’s AML regime, most significantly in relation to cryptoassets.
Mirroring earlier proposals by the European Commission, in a move anticipated by the industry, HM Treasury has confirmed that it will implement a regime whereby third-party firms designated as “critical” will be subject to direct regulatory oversight by the financial regulators. The Treasury published a policy statement on 8 June 2022, setting out its framework for mitigating the risks caused by financial services firms outsourcing important functions to third-party service providers.
At UK FinTech Week 2022 in April, the Treasury announced a host of new and forthcoming initiatives to build on the UK’s “FinTech success stories” and support its push to become the loading global hub for crypto businesses. The initiatives range from incubators (like the Financial Market Infrastructure Sandbox and the FCA’s CryptoSprint events), to industry engagement partnerships through a Cryptoasset Engagement Group, to reviews of the tax treatment of crypto and the legal status of Decentralised Autonomous Organisations. Most significant among the announcements is the Treasury’s confirmation that it will bring activities that issue or facilitate the use of stablecoins used as a means of payment into the UK regulatory perimeter.
This edition of Bite-size Briefings explores the regulation of crypto (or digital) assets across a number of jurisdictions: Australia, Brazil, Hong Kong SAR, Singapore, the UK and the US.
Episode 26: UK Fintech Week 2022: State of the Fintech Nation
In this episode of FInsight, London partners Sue McLean, Mark Simpson, and David Hart talk about UK Fintech Week 2022. They cover the biggest trends and developments around fintech in the UK, with special focus on the expected topics throughout the event. The episode takes a closer look at the investment landscape (including the UK’s position as a fintech hub, active investors and top sub-sectors) and the current and expected regulatory developments that fintech players need to watch out for.
The Financial Services Regulatory (FSR) Momentum Monitor is a horizon-scanning tool enabling financial service providers to plan and prepare for coming developments across the jurisdictions in which they operate. Grouping upcoming changes into key business-relevant themes, the FSR Momentum Monitor highlights the extent and expected impact of upcoming regulatory intervention in multiple jurisdictions across the globe.
On 18 January 2022, HM Treasury confirmed that it will bring certain cryptoassets into the scope of the financial promotion regime. The Treasury’s view is that the evidence of risks to consumers provides a strong case for intervention, and as such it intends to expand the scope of the Financial Promotions Order to include cryptoassets. The Treasury’s announcement was followed the next day by the launch of an FCA consultation on strengthening the financial promotion rules for high-risk investments, including cryptoassets.
We are delighted to have joined this ground-breaking initiative supporting The Payments Association and other private industry stakeholders in the creation of the Green Paper report examining the potential for Central Bank Digital Currencies, ‘A New Era for Money’. The paper advocates for closer public-private collaboration to advance exploration of a digital currency in the UK, before a real-world pilot of ‘digital pound’ (dSterling).
Regulators and policymakers have left emergency measures behind and returned to their reform agendas. In this piece, Baker McKenzie regulatory experts set out the top ten UK developments for financial institutions and fintechs to watch in 2022 covering: good culture, Consumer Duty, BNPL regulation, crypto regulation, AML regulation, appointed representatives regime, financial promotions gateway, operational resilience, ESG regulation, divergence, Future Regulatory Framework Review.
The FCA has published a consultation (CP21/34) proposing changes to the Appointed Representatives (AR) regime. In parallel, HM Treasury (HMT) has published a Call for Evidence on possible legislative reforms to the AR regime. These papers present significant, wide-ranging changes that have the potential to seriously impact the way that AR arrangements operate, and the burdens placed on principals in particular.