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On June 29, 2023, the Financial Services and Markets Bill was granted Royal Assent, transforming it into the Financial Services and Markets Act 2023 (FSMA 2023), as confirmed by an HM Treasury Press Release. The introduction of the Bill to Parliament took place in July 2022.

FSMA 2023 serves as an implementation of the proposals contained in the Future Regulatory Framework Review. The purpose of this Review was to determine the necessary adaptations to the UK's financial services regulatory framework following Brexit (its exit from the EU), and to ensure its continued effectiveness.

The changes introduced by FSMA 2023 have a substantial and extensive impact on the UK's financial services environment. These alterations encompass:

  • The repeal of the retained EU law on financial services, replacing it with a statutory framework for an extensive FSMA model of regulation. Under this new regulation model, HM Treasury and financial services regulators will develop legislation and rules tailored to UK markets.

  • Augmentation of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA)'s powers and responsibilities, and the introduction of new secondary objectives for these regulators. This will foster competitiveness and stimulate the growth of the UK economy.

  • The foundation for further reforms in various policy areas via a new designated activities regime. Notably, this will include a new regulatory framework for public offers of securities and admissions to trading on regulated markets, which will supersede the current UK prospectus regime.

  • Implementation of the results from the Wholesale Markets Review, streamlining regulation within these markets.

  • Integration of stablecoins into the regulatory perimeter and empowering the government to establish a regime to oversee broader cryptoasset activities.

  • Introduction of consumer protection measures, which include a new regulatory gateway for financial promotions by unauthorised firms, initiatives to safeguard access to cash, and heightened protection for victims of authorised push payment fraud.