The Financial Services and Markets bill gives the Bank of England the power to limit the reach of the Financial Conduct Authority in regulating payments systems using digital settlement assets. The new legislation, presented by the UK Chancellor of the Exchequer Nadhim Zahawi on July 20, enhances the competitiveness of the country’s financial services sector.
The bill repeals hundreds of pieces of EU retained law to enable a coherent, agile, and internationally respected regime that works in the interests of the British people. The new law safeguards and protects consumers. It enables Payment Systems Regulator to direct banks to reimburse victims of Authorized Push Payment fraud. Moreover, the bill will work toward the government’s vision for the sector that is open, green, technologically advanced, and globally competitive.
Zahawi, in an official statement, said that they are repealing hundreds of pieces of burdensome EU regulations and seizing on the benefits of Brexit to ensure that the financial sector works for the benefit of the British people and businesses. Financial regulators now have greater responsibility for setting the requirements for UK financial services. The UK, for the first time, has a new secondary objective to promote the growth and competitiveness of the UK economy, including the financial services sector. It will strengthen the regulators’ existing objectives of ensuring the safety and soundness of firms, protecting and enhancing the integrity of the UK financial system, and promoting competition in the interests of consumers. It also sees that consumers receive an appropriate degree of protection.
According to the new law, digital settlement asset (DSA) service providers are involved in payment services involving digital assets as a settlement layer or those who safeguard the settlement assets. The DSA providers exchange fiat for digital currency and vice versa. The Treasury can designate a DSA as a recognized service provider, but the Bank of England should not wholly operate the DSA. It should see not make designations that could compromise the financial stability of the UK.