Regulatory UK News

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The Financial Services Consumer Panel represents the interests of consumers and small businesses by providing advice and challenge during the development of rules and policies. The Practitioner Panel represents the interests of practitioners in the financial services industry and offers external input. The Smaller Business Practitioner Panel represents smaller regulated firms that may not have a strong voice in policy making. The Markets Practitioner Panel reflects the interests of practitioners who are likely to be affected by the market-facing functions of the Financial Services Consumer Panel. The Listing Authority Advisory Panel advises on policy issues affecting issuers of securities and the FCA listings function. Lastly, the Cost Benefit Analysis Panel is currently being created and is expected to be fully operational by the end of 2024.

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The content is a discussion paper (DP) released by the UK Treasury to develop a regime for fiat-backed stablecoins, specifically when used as a means of payment. The Treasury aims to define fiat-backed stablecoins in legislation and is considering changes to payments legislation to enable retail payments using these stablecoins. The DP will be part of a joint publication package with the Bank of England's Discussion Paper on systemic payment systems using stablecoins and the Prudential Regulation Authority's Dear CEO letter on innovative uses of deposits, e-money, and stablecoins. The intended audience includes individuals and organizations involved in the cryptoasset sector, such as stablecoin issuers, custody providers, payment service providers, industry groups, professional advisors, consumer groups, policy makers, regulatory bodies, industry experts, commentators, academics, and think tanks. Feedback on the DP is requested by February 6, 2024, and the government plans to legislate for a future financial services regime for cryptoassets, starting with fiat-backed stablecoins. The regulation will cover the issuance and custody of these stablecoins under the Financial Services and Markets Act 2000 and their use as a means of payment under the Payment Services Regulations.

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The Financial Conduct Authority (FCA) has published guidance to support cryptocurrency firms in complying with new marketing rules. The guidance also outlines how authorized firms should apply the Consumer Duty to their marketing activities. Lucy Castledine, Director of Consumer Investments at the FCA, emphasized the importance of industry input in developing the guidance. The FCA will continue to engage with firms and monitor the evolving cryptoasset sector and regulatory landscape. The FCA has previously provided examples of good and poor marketing practices and reminds consumers that cryptoassets are high-risk investments. Consumers are advised to check the Warning List before investing in cryptoassets. The FCA has offered flexibility to registered or authorized cryptoasset firms to implement certain rules by January 8, 2024. All other measures of the financial promotions regime came into effect on October 8, 2023. Firms promoting cryptoassets to retail consumers in the UK must be authorized or registered by the FCA or have their marketing approved by an authorized firm. The FCA has been working closely with the government and international counterparts to develop the rules on promoting cryptoassets. The FCA has issued warnings and alerts to firms regarding compliance with the new rules. Additionally, the FCA plans to publish a Discussion Paper on regulating stablecoins for use in payments in the UK and encourages stakeholders to engage with it.

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