Capturing the opportunity for economic growth

This article is written by our Chief Executive, Nikhil Rathi.   

This week I was pleased to join global leaders and investors at the Government’s UK investment summit.   

Financial services is one of the UK’s greatest assets and plays a critical role in driving growth across the economy. It features prominently in the Government’s industrial strategy.

I know regulation plays a key part in the success of financial services. By ensuring trust in our markets, unlocking investment and providing an efficient service to firms, we enable a fair and thriving sector. One that can compete on the world stage and help the wider economy to prosper.    

Trusted financial markets  

In his speech this week the Prime Minister focused on the importance of stability in delivering growth.  We agree. 

Clean, trusted and stable markets are the foundation for sustainable economic growth. It means consumers and businesses have the confidence to spend, save, invest and innovate. We’ve stepped up our work to tackle those that would cause harm and undermine hard won trust.  

Last year, following our intervention, 10,008 financial adverts were removed or amended, up from 8,582 the year before. We doubled the number of firm authorisations cancelled for failing to meet our minimum standards.   

And a more targeted approach in enforcement is also delivering:  nine successful fraud prosecutions last year and 21 charges – the most we've made in a year.   

Financial crime and misconduct is a serious drain on growth and competitiveness and we are determined to play our part in keeping our markets clean. 

Trust also underpins our transition to a more sustainable future.  Our sustainability disclosure and labelling rules are leading the world. They will help investors make informed decisions, build trust and support the UK’s position as the place for asset management and sustainable investment.   

Our Consumer Duty creates an environment for healthy competition based on high standards, which helps support competitiveness, confidence and trust in UK financial services.  

We’re now using the opportunity presented by the outcomes focused nature of the Duty to identify how we can streamline our rulebook, potentially removing unnecessary rules. Our Call for Input runs until 31 October, so make sure you have your say.  

Enabling investment  

We’re working to facilitate greater investment in the economy to help boost productivity and growth.  

In July this year we announced the biggest change to the listing rules in over three decades. The new rules created a simplified regime and streamlined eligibility for those companies seeking to list their shares in the UK. They aim to make it easier for firms to raise capital and create more opportunities for investors. We’re pleased that firms have already begun to take advantage of the new flexibility. 

We followed this announcement just weeks later with a package of measures to further boost the UK’s position as a global and vibrant financial centre. This included proposed changes to the prospectus regime to make sure investors get the information they need while significantly reducing the costs associated with further capital raises for companies. 

We’ve also introduced proposals for a new value for money framework for savers invested in workplace defined benefit contribution pension schemes.  And last year we introduced new rules to give retail investors and more defined contribution pension schemes access to Long Term Asset Funds.   

Longer-term less liquid assets can generate good alternative returns for investors and help to grow the UK economy through investments, such as new infrastructure.  

Regulation for a brighter future  

A world leading financial services sector needs a world leading regulator.  One which makes it easy to do business, not stand as an inhibitor to firms’ success.  

We have improved the service we provide to firms while maintaining high standards to protect consumers and the reputation of the UK. Our most recent results show that over 98% of applications for authorisation were determined within the statutory deadline.  

We know too that firms sometimes find it hard to supply the data we ask for. We're working with the Bank of England to adopt common standards, modernise and integrate reporting so we can get the data we need at a lower cost to industry.   

A shared endeavour  

We welcome the government’s industrial strategy and look forward to working together on its future approach to financial services regulation.  We know growth is a shared endeavour. As the Prime Minister said ‘growth is a cause that binds us together’. 

We’ll continue our intensive work with Government, partners and industry to boost the sector’s international competitiveness and support economic growth.