Financial Services and Markets Act 2023, No. 29 (as amended)

The Financial Services and Markets Act 2023 is a significant piece of legislation that introduces comprehensive reforms to the UK’s financial services sector. Its purpose is to adapt the regulatory framework post-Brexit, ensuring that the UK remains a competitive, innovative, and stable marketplace for financial services.

Purpose: The Act aims to:

• Enhance the competitiveness of UK financial markets.
• Encourage innovation and the use of new technologies in financial services.
• Promote effective capital usage and maintain financial stability.
• Support the UK’s ambitions as an independent trading nation.

Requirements: The Act sets out:

• Firm-facing requirements for financial services firms, many of which were previously part of EU law.
• New regulatory powers for the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and the Bank of England.
• Provisions for sustainability disclosure requirements and digital settlement assets.
• Measures to support broader government policies such as financial inclusion and consumer protection.

Applicability: The Act applies to:

• Almost all financial services firms operating within the UK.
• Users of financial services and markets, directly or indirectly.
• Regulators like the FCA, PRA, and the Bank of England, which will oversee the implementation of the Act’s provisions.

This Act represents an evolution of the UK’s financial services regulatory environment, with a focus on adapting to a post-Brexit context while promoting growth and innovation within the sector.

The Financial Services and Markets Act 2023 outlines specific evidence requirements to ensure compliance with its provisions. These requirements are designed to support the enforcement and oversight capabilities of regulatory bodies such as the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

Evidence Requirements:

• Firms must provide clear and accessible records of their financial activities and decisions.
• There is an emphasis on transparency in reporting, particularly concerning sustainability disclosure requirements and digital settlement assets.
• The Act mandates regular audits and reviews of financial practices to ensure adherence to the new regulations.
• Firms are required to submit detailed reports on their testing of financial market infrastructure technologies or practices.
• In cases of designated activities, firms must present sufficient evidence to demonstrate compliance with the specific rules set out by the Act.
• The Act also includes provisions for the mutual recognition of international standards and agreements, which may require evidence of alignment with these standards.

These evidence requirements are part of the broader regulatory framework established by the Act, which aims to maintain the integrity and stability of the UK’s financial markets post-Brexit.