’Proportionality is essential for a competitive market,’ says executive director 

The new Financial Services and Markets Act 2023 will bring in a growth and international competitiveness objective for the UK regulators – something the insurance industry has wanted for many years.

That was according to Biba executive director Graeme Trudgill, who said the bill was a “landmark piece of legislation” that delegates “vast powers and responsibilities to the UK’s financial services regulators”.

The act, which has been described as a “rocket boost for the UK economy”, was granted royal assent last week (29 June 2023).

It introduces new secondary objectives for the FCA and PRA – to facilitate the growth and international competitiveness of the UK economy.

This will be backed up by changes to enhance the scrutiny and accountability of the regulators, including ensuring regular reporting and a greater focus on cost-benefit analyses.

In a LinkedIn post after royal assent was granted (30 June 2023), Trudgill said: ”The act brings in a growth and international competitiveness objective for the UK regulators, which is a key Biba manifesto issue and we and the insurance industry have wanted for many years.

”It is a secondary objective that in no way detracts from the primary objectives of making markets work well, consumer protection, integrity of the financial services system and promoting market competition.”


The government said in a statement that the new act ”seizes the opportunities” of Brexit by tailoring financial services regulation to fit UK markets. 


For brokers, Trudgill felt the new legislation would encourage a greater focus on proportionate regulation.

”Proportionality is essential for a competitive market because regulation that produces ‘form over substance’ is a risk to a healthy market,” he added.

Ivor Edwards, partner at law firm Clyde and Co, added that holding regulators to account will help enhance the competitiveness of the UK market, but warned the bill was ”very much stage one in terms of building a post-Brexit regulatory framework in the UK”.

“As regulators focus on improving both day to day operations and attracting new entrants and investment to the UK, they will need to tread a fine line,” he said.

”If UK regulation diversifies too far from that in the EU, there is a risk that it will exacerbate differences between the two markets to negative effect.

”Moving forward, this will be a difficult balancing act. All stakeholders will be watching future developments with interest.”

Speedy implementation

The act also contains new powers – available due to Brexit – that will set the path for reforms to Solvency II, unlocking around £100bn for investment.

The London Market Group (LMG), on behalf of the entire specialty insurance market, said it welcomed the new bill.

The LMG has been at the forefront of calls for a more proportionate and accountable regulatory framework.

Caroline Wagstaff, chief executive of the LMG, said: “The focus must now shift to ensuring a speedy implementation of measures.

”The issue here is now about the pace of change – what are the regulators going to change to deliver on the new secondary objective, how fast will they implement those changes and how will the success, or otherwise, be measured.

“This is vital if the UK is to keep pace with the increasingly fierce international competition for investment. We look forward to continuing to work with the government to make a success of these important changes.”