TheAct – formerly the Financial Services Bill 2019-21 – wasintroduced in the House of Commons on 21 October 2020, and makesreforms to 22 distinct areas.
Thebackground of the Act
Thehistory of the Bill can be traced to the 2019 Queen’s Speechbackground paper, which expressed a desire to use the upcomingparliamentary session to bring forward legislation to “ensure thatthe UK maintains its world-leading regulatory standards and remainsopen to international markets after we leave the EU.”
TheBill’s stated objectives at the time of its introduction to theHouse of Commons included enhancing the UK’s prudential standardsand promoting financial stability; promoting openness between the UKand international markets; and maintaining an effective financialservices regulatory framework and sound capital markets.
TheTreasury later added another objective in acknowledgement ofamendments made during the Bill’s passage through Parliament, to“protect consumers who use a range of financial services.”
Whatare the standout changes in the Act?
Organisationsusing various services offered by London Registrars such asdirectors’ service addresses, the preparation and submission of theannual Confirmation Statement, and the maintenanceof statutory registers andmore, are likely to take an interest in the various measurescontained in the Act.
Eye-catchingelements of the legislation include, among others, Section 30 oninsider lists and managers’ transactions, as well as theinformation on maximum sentences for insider dealing and financialservices offences in Section 31.
Section30, for instance, amends UK Market Abuse Regulation (MAR) to clarifywho is required to maintain an insider list. Specifically, it setsout that issuers and any person acting on their behalf or on theiraccount all must maintain such a list, as opposed to issuers or anyperson acting on their behalf or account.
Alsoincluded in this section is an amendment to Article 19(3) of UK MAR,to modify the timetable within which issuers are required to disclosetransactions by PDMRs and PCAs to the public. Issuers are nowexpected to disclose transactions within two days of the PDMRs andPCAs notifying them of those transactions, rather than no later thanthree business days following the transaction date.
Meanwhile,Section 31 extends the maximum sentence for criminal market abusefrom seven to 10 years.
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